It’s natural to focus on your salary when you’re looking at your new job. While money certainly isn’t everything, most of us our working our job so that we can cover expenses, provide for our loved ones, and enjoy our lives. Financial support plays a large roll in deciding between different jobs.
But salary isn’t the only financial item you should be looking at.
Other financial benefits and amenities can add up to pretty substantial amounts over time. Health insurance is certainly one benefit most look for. Another one to prioritize is 401k matching.
What is 401K Matching?
You’ve probably heard the term 401k matching, but what does it really mean? A 401k is a retirement savings plan setup by an employer. Think of it as a separate account you’re able to deposit a portion of your earning in.
If your employer offers 401k matching, that means that when you put money into your 401k, your employer will “match” your contribution, placing additional money into it. Of course, it’s not quite that simple.
Different employers offer different terms, restrictions, etc. Additionally, your employer may offer a 401k without providing any matching.
Does 401K Matching Matter?
The short answer is…yes.
401k matching is essentially free money given to you on top of your salary. It almost acts as a reward for consistently setting money aside for retirement. In fact, it can serve as a strong motivator for retirement savings.
The more you put into your 401k (up to a certain point), the more you’ll receive from your employer. When comparing different jobs, you should definitely be factoring in 401k offers.
How Much Should You Look For?
Chances are, there will be a limit placed on the amount of money your employer will match. Typically, this will be a percentage of your overall all salary with the average being around 3 or 4%. While you can put away more money than this, your employer will stop matching your contributions once the limit has been reached.
You’ll also need to be mindful of vesting schedules. This is essentially how long it takes before you have ownership over the 401k contributions your employer has made. Some have immediate vesting, which means the money is yours as soon as it’s deposited.
Other companies may require you to work there for anywhere from 1-5 years before all of the matching funds become yours. Always make sure to ask for the full terms of your employer’s 401k benefits.
Start Working on Retirement Now
Whether or not your company offers 401k matching, you can (and should) start saving for your retirement now. The earlier you start, the easier it is. The good news is, it’s really not as complicated as it sounds.
However, the best way to go about it is with the guidance of a trained financial advisor by your side. There are a variety of retirement and savings options out there, from 401ks to IRAs to stocks and more. The best option for you might not be the same as everyone else.
At KB&P Partners, we work hands-on with our customers to understand their financial standing and their goals. From there, we can create plans that they can follow through on.
For retirement planning Springfield, Ohio and beyond, contact KB&P Partners today!