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How Does Employer Matching Work?
Employer matching is based on the amount you contribute to your 401(k). Here’s how it typically works:
401(k) Employer Match
What is a 401(k) employer match?
A 401(k) employer match is a contribution that your employer makes to your retirement account, essentially “matching” the money you set aside in your 401(k) up to a certain percentage. This match is an added benefit designed to help employees build their retirement savings more quickly. Simply put, it’s free money from your employer to help you secure your future!
You Contribute a Percentage of Your Salary
You choose a percentage of your paycheck to contribute to your 401(k) account. For example, if you earn $50,000 annually and choose to contribute 4%, you’d be putting $2,000 into your 401(k) each year.
Your Employer Matches a Portion of Your Contribution
Employers often match up to a certain percentage of your contributions, such as 3% or 5% of your salary. If your employer offers a 5% match and you’re contributing at least that amount, your employer would add another $2,500 to your account (on a $50,000 salary) each year.
Your Savings Grow Over Time
With both your contributions and the employer’s match, you’re building your retirement fund at a faster rate. Over time, this additional money, plus any investment returns, can make a substantial difference in your retirement savings.
Why Employer Matching Matters
An employer match is one of the most effective ways to maximize your retirement savings. By contributing enough to qualify for the full match, you’re essentially doubling your retirement contributions without any extra out-of-pocket cost. Over time, employer-matched contributions can grow significantly, helping you reach your retirement goals faster.
The SECURE 2.0 Act and Student Loan Matching
Traditionally, employer matching contributions have only applied to direct 401(k) contributions. However, with the SECURE 2.0 Act, employees who are focused on paying off student loans can also benefit from employer matching. With the right setup, student loan payments can qualify as a 401(k) contribution, allowing employees to grow their retirement savings even while managing debt.
How Loan Certify Makes it Easy
Loan Certify helps employees turn student loan payments into retirement savings by verifying their payments so they qualify for 401(k) matching contributions. This new option allows employees to make the most of employer matching without sacrificing student loan payments, making it easier to balance both financial goals.
Maximize Your Retirement Savings with Employer Matching
Whether you’re contributing directly to your 401(k) or making student loan payments that qualify, taking advantage of an employer match is key to building a secure financial future. With Loan Certify and the SECURE 2.0 Act, it’s now possible to grow your retirement savings while managing student debt.
Ready to turn your student loan payments into retirement savings?
Don’t miss out on this powerful benefit—start your journey to a more secure financial future today.