Making the Most of a Match

If your employer matches 50% of 6% of your pay, and you’re contributing 5% of yours, you might want to spring for the added 1%. If you’re earning $75,000, that would mean $1,125 more in your account—$750 from you and $375 from your employer.

You may also want to check whether your employer calculates matching based on your total annual contribution or the contribution each pay period. If it’s by pay period, there may also be a cap on the amount an employer will contribute in any single period. This means you could end up with more matching if you spread out your contributions over the entire year.

Finally, if you know you’ll be changing jobs before the end of the year, and will have to wait to enroll in your new plan, you may want to increase your contribution rate to put away the maximum for the year—or as much as you can afford—before you move on.

It’s a good idea to check with the person or office responsible for handling your employer’s 401(k) before you make a major decision. You probably won’t be the first person to ask a question, and there may be some helpful answers.