Written by Michael Feder
Reviewed by Jessica Roper, MBA,director of Career Services at ۴ý
For many graduates,completing a degreeprecedes seeking full-time employment, a promotion or a job change. However, you don’t need to complete your degree to start looking for your new role, promotion or job change. You can start your job search while still enrolled and taking courses.
In addition to looking at responsibilities and salary, job seekers should try to understand what employer matching programs are available. Contribution matching by employers can helpemployees save for retirement, build financial security and make their philanthropic donations go further.
Some matchingcontributionshelp relieve stress related to contributing to aretirement planand allows employees tosave more moneythan they could alone. Of course, matching programs vary by employer, and it can help to know what to look for. Read on!
In the simplest terms, employer matching contributions refer to an employer’s commitment to match all or a portion ofan employee’s contributionsto a certain fund or charity.
There are four primary types of employer matching programs:401(k) matching, gift (or donation) matching, matched savings programs and student loan repayment matches.
Job seekers need to understand the different types so they can make informed decisions when considering their employment options.
Most employer matching contributions are in the form of. They may match an employee’s contributions up to a certain percentage of their salary.
An employer’s contributions are generally based on how much an employee contributes to their 401(k) each year. An employer usually sets a limit for the amount of money they will match, such as 3% of an employee’s salary or up to a certain dollar amount.
Two of the most popular 401(k) matching plans are:
When it comes to employer 401(k) matching, there are certain limits that should be considered. These limits vary by type of plan and employer but can include:
Knowing the types of plans available, including their limits and applicable taxes, can help ensure you get the most out of your matching contributions.
is when an employer agrees tomatch employee donationsto a charity. This type of program offers a ripple effect of benefits: Employees might be inspired to donate more than they normally would, and charities receive more than they would from an individual donor.
Gift-matching programs can be set up in many ways. For example, some employers will match dollar for dollar, while others may match a certain percentage of each donation. The employer will also generally limit the total amount they contribute to charity in a given year.
Employer savings match programshelp employees savefor specific goals, such as buying a home or paying down student loans. It can also be used for different savings accounts, such as or employer-sponsored (although these are not common). With these programs, employers will match employee contributions up to a certain point, such as 50% of the total amount saved in a given year.
These employer-sponsored savings are beneficial for both employers and employees. They help employees save money for their future goals or emergencies, and employers can use them to attract and retain top talent.
When it comes to an employer matching program, there are a few things you can do to:
Employer matching programs are a major perk that employees should always take advantage of if available. Understanding the different types of employer matching programs, such as 401(k) and student loan repayment matching, is crucial for making the best decisions when it comes to your financial future.
By taking advantage of these benefits and following the tips outlined above, you can maximize your retirement savings and receive the most from employer matching programs.
This article is not intended to serve as financial advice. All financial decisions, including investments, should be made carefully and potentially with the guidance of a financial planning professional.
A graduate of Johns Hopkins University and its Writing Seminars program and winner of the Stephen A. Dixon Literary Prize, Michael Feder brings an eye for detail and a passion for research to every article he writes. His academic and professional background includes experience in marketing, content development, script writing and SEO. Today, he works as a multimedia specialist at ۴ý where he covers a variety of topics ranging from healthcare to IT.
Jessica Roper, ۴ý director of Career Services, is a seasoned leader with over 15 years of experience in leadership within higher education. She has honed her expertise in student services and career development and is passionate about helping others discover and refine their skills.
This article has been vetted by ۴ý's editorial advisory committee.
Read more about our editorial process.
Read more articles like this: