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Maximize Employer Match
More than 75% of those contributing to an employer-sponsored retirement savings plan receive matching contributions, and more than three-fourths of those participants contribute enough to receive the full match, according to TIAA-CREF's Perfect Match Survey. But, only 72% of women and 64% of workers earning less than $35,000 annually receive the entire match.
Many people don't appreciate what they're giving up by not getting the full match. As an experiment, researchers developed a specific set of facts regarding how much could be earned from the employer match (earn $50,000 annually from age 35 to age 65, a 3% match, contribute enough to get the full match). They calculated that the employer contribution would be worth almost $73,000 by the time the participant reached age 65.
Almost one-third of respondents said it would be worth less than $50,000. Generation Y respondents, those earning less than $35,000 annually, and women were even more likely to underestimate the value of how much the full match could be worth in retirement. TIAA-CREF concluded that data-driven examples would help participants realize how much they're giving up by not contributing enough to earn the full employer match.
Learn more at http://tinyurl.com/TIAACREFMatch.
For plan sponsor use only, not for use with participants or the general public. This information is not intended as authoritative guidance or tax or legal advice. You should consult with your attorney or tax advisor for guidance on your specific situation.
Kmotion, Inc., P.O. Box 1456, Tualatin, OR 97062; 877-306-5055; www.kmotion.com
© 2015 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this publication are for general information only and are not intended to provide tax or legal advice or recommendations for any particular situation or type of retirement plan. Nothing in this publication should be construed as legal or tax guidance; nor as the sole authority on any regulation, law or ruling as it applies to a specific plan or situation. Plan sponsors should consult the plan's legal counsel or tax advisor for advice regarding plan-specific issues.