investing

Employers Cutting 401(k) Matching Contributions

Roughly 12% of employers have suspended matching contributions and an additional 23% are planning to cut their match or are considering it.

The pandemic, which has changed the way millions of people work, is also starting to change the way they save — and not in a good way.

Some 12% of employers have suspended matching contributions to their 401(k) plans, and an additional 23% were planning to cut their match or were considering it, according to a survey conducted in late April by Willis Towers Watson, a human-resources consulting firm. A separate survey by the Plan Sponsor Council of America found that nearly 22% of companies with 1,000 or more employees are suspending or reducing matching contributions to 401(k) plans. Companies in hard-hit industries, such as retail and travel, were more likely to suspend contributions to employees’ retirement plans.

How quickly matches are restored will depend on how fast the economy recovers, but many companies hope the suspension will last only a few months, says Robyn Credico, defined-contribution practice leader for Willis Towers Watson. “I think there’s a lot of belief that by the last quarter of this year or early next year, things will improve,” she says.

Although a company match provides a great incentive to contribute, don’t use the loss of your match as an excuse to stop saving, Credico says. Instead, if you can afford it, try to contribute a little more to make up the difference. With or without a match, she says, “your retirement needs aren’t going to change.”

Most Popular

Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
The 12 Best Tech Stocks to Buy for 2022
tech stocks

The 12 Best Tech Stocks to Buy for 2022

The best tech-sector picks for the year to come include plays on some of the most exciting emergent technologies, as well as several old-guard mega-ca…
January 3, 2022
How to Know When You Can Retire
retirement

How to Know When You Can Retire

You’ve scrimped and saved, but are you really ready to retire? Here are some helpful calculations that could help you decide whether you can actually …
January 5, 2022

Recommended

12 Questions Retirees Often Get Wrong About Taxes in Retirement
retirement

12 Questions Retirees Often Get Wrong About Taxes in Retirement

You worked hard to build your retirement nest egg. But do you know how to minimize taxes on your savings?
January 21, 2022
Why Women Need to Take a More Active Role in Their Financial Futures
Women & Money

Why Women Need to Take a More Active Role in Their Financial Futures

It’s a mistake to let someone else make all your decisions or take care of everything for you. You can start taking control of your finances by review…
January 17, 2022
Is the Stock Market Closed on MLK Day?
Markets

Is the Stock Market Closed on MLK Day?

Both the stock markets and bond markets will have Monday off as the nation honors civil rights leader Martin Luther King Jr.
January 15, 2022
Stock Market Holidays in 2022
Markets

Stock Market Holidays in 2022

Is the stock market open today? Take a look at which days the NYSE, Nasdaq and bond markets take off in 2022.
January 14, 2022