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Are You Turning Down Extra Money?

If you’re not contributing enough to earn your company-sponsored retirement plan’s full match, then you’re missing out on extra money that can help your retirement savings grow faster.

It’s hard to imagine a scenario when turning down money is a good idea. So if your company-sponsored retirement plan offers an employer match, be sure to take advantage of this valuable benefit – your employer basically pays you to save for retirement!


Employer matching contributions can help you grow a bigger retirement nest egg than you might otherwise have with just your own savings. Put another way, it’s an opportunity to increase your retirement savings, without really having to do anything other than save enough to get the full match from your employer. So, it’s important to make sure you’re saving at a rate that will result in the biggest matching contribution. If you’re not, you could be leaving money on the table — and missing out on a simple way to get more money for your retirement.

Your employer determines the amount of the match and how it’s calculated. Employers vary on how they design their matching contribution, but here are two common examples that show how an employer match might work:

Example 1: Dollar-for-dollar match up to 4%

For every dollar you save in your retirement plan this year, your employer will also kick in a dollar, until your employer has contributed an amount equal to 4% of your gross salary (before taxes and other deductions) for the year. Next year, your employer will match your savings again.

Match Table

Example 2: 50% match up to the first 6% of pay

In this example, your employer will put in $0.50 for every dollar you contribute to your retirement, up to 6% of your gross salary, each year. So, if you make $50,000 a year and you save at least 6% ($3,000) in your retirement account, you’d receive $1,500 in matching contributions from your employer. If you only save 3% of your pay ($1,500) you employer will only put in 50% of that, or $750. That’s why it’s important that your savings rate is at least as high as it needs to be to get the full match.

Match Table

Match Chart with Header and Disclosure

Your employer’s matching program may be different from the examples. You’ll want to find out exactly how much of your savings your employer will match; because every week you don’t earn your full match, you’re missing out on extra money you can’t get back! Call your Retirement Specialist at 1-800-743-5274 to learn more.


No matter how the match is calculated, the government limits how much you and your employer can contribute to your retirement plan each year. For 2018, you can save up to $18,500 of your own money in your company-sponsored retirement plan (such as 401(k), 403(b) and 457 plans).* Your employer’s contribution doesn’t count toward your annual limit.

If you’re age 50 or older, you can set aside an additional $6,000 for retirement with “catch-up” contributions. Check to see if your employer matches catch-up contributions too. Some do, some don’t. Still, if you’re able to save an additional amount for retirement, you should. 


Matching contributions from your employer are a great perk, but they may be subject to a vesting schedule. “Vesting” determines how much of your employer’s contributions you can take with you if you leave your job. When you’re fully vested, they’re all yours.

Most employers have a gradual vesting schedule that allows you to keep more matching dollars the longer you stay with your employer. Of course, you’re always 100% vested in any contributions you make to your retirement plan account. Your savings are yours, no matter how long you stick with your employer. Your Human Resources or employee benefits representative can provide information on your company’s vesting schedule.


Now is the perfect time to make sure your savings are on track. Review your current savings rate, and if you’re not contributing enough of your pay to get the full match from your employer, consider increasing your savings today. Don’t miss out on the extra money you may be leaving on the table!

Log in and increase your savings contribution to earn your full match. If you don’t know how much your employer will match or your current savings rate, your Retirement Specialist is ready to help. Call 1-800-743-5274 today!

Don’t know how much to save for retirement? Try the Retirement Income Calculator, a tool that lets you model different scenarios based on your specific circumstances.

*Total combined Traditional and Roth savings may not exceed $18,500 beginning in 2018.

The information contained herein is not intended or written as specific legal or tax advice and may not be relied on for purposes of avoiding any federal tax penalties. Neither MassMutual nor any of its employees or representatives are authorized to give legal or tax advice. You must rely on the advice of your own independent tax counsel.

© 2018 Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001.  All rights reserved.