Average 401(k) Match: Do You Work for a Generous Company?

Workplace 401(k) accounts have become critical to retirement security, and with good reason.

The majority of private sector workers have access to these plans, which are easy to enroll in and come with generous tax breaks.

A growing number of plans enroll workers by default unless they opt out, making retirement savings the new norm in many workplaces.

From just $107.88 $24.99 for Kiplinger Personal Finance

Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues

CLICK FOR FREE ISSUE

Sign up for Kiplinger’s Free Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

A 401(k) offers more than just a simple signup process, automatic contributions from paychecks and a streamlined mix of investment options from which to choose.

Many also come with employer matching contributions, which can be incredibly valuable as companies provide free money to help boost retirement savings with each eligible contribution you make.

Matching contributions refer to money that your employer puts into your 401(k) when you invest your own funds.

"A good matching rate is key in securing your retirement," explained Wheeler Pulliam, CFP® and financial consultant at Xponify Financial. "For many, the only reason to contribute to a 401(k) is because they match. Without a match, it makes more sense to contribute to an outside IRA because you have more investment options and more control over your IRA than you would in the company’s 401(k) plan."

What is a good matching rate?

The reality is that some companies are far more generous with their matching contributions than others, as recent research has shown.

Let's look at some of the U.S. companies doing the most to help their workers achieve retirement success. We'll also examine details about average 401(k) matches so you can see how your own company's offerings compare.

Ten U.S. companies with some of the most generous 401(k) matching contributions

Recent research from SmartAsset revealed the companies in the United States that were most generous in providing employer 401(k) contributions to staff. SmartAsset evaluated companies based on which company offered the maximum match for eligible workers.

SmartAsset included data on:

Match type: Some companies offer a full match or a dollar-for-dollar match, so if you contribute $1,000, they will do the same. Others offer a partial match, for example, providing 50% or 75% of the amount you contribute. Still others make non-elective contributions or simply put money into your account regardless of whether you do the same.

Maximum match: Most companies set a maximum contribution (which may be lower than the annual 401(k) contribution limit set by the IRS). This limit could be a fixed dollar amount or a percentage of your salary (for example, your employer might match 100% of contributions up to 4% of your salary).

The table below ranks the top 10 companies by the matching contributions they offer. "Percent match" represents the amount of an employee's contribution that the company will match. "Percent of salary" refers to the maximum percent of a worker's salary that a company will match.

Source: SmartAsset

A generous 401(k) isn't just about the match

It's also worth noting that the match alone is not the only factor that affects whether a company is generous with its 401(k) contributions. other indicators that a 401(k) plan is a good one include:

Eligibility: Some companies require you to work for the business for a certain period before you become eligible for matching contributions, such as a month or a year. Other companies extend 401(k) match eligibility to part-time employees.

Vesting period: This determines when your matching funds are yours to keep, even if you leave your job. Some companies offer immediate vesting, so if an employer contributes to your 401(k) today, you can keep the money if you leave tomorrow. Others have graded vesting schedules, so your actual ownership stake in your employer's contributions grows over time (your own contributions are always 100% vested from day one).

Some companies also offer additional retirement perks beyond simple matching contributions.

For example, GM matches up to 4% of an employee's pay but also provides an additional automatic contribution of 6% of pay, essentially giving the employee a 10% match. Verizon also matches 401(k) contributions for qualifying student loan payments up to a combined 6% of your salary.

How does your 401(k) match compare?

Every worker would love a dollar-for-dollar match equal to 25% of their compensation, which they become eligible for on day one and which vests immediately!

With this matching structure, if you made $100,000 per year and contributed the maximum $23,500 contribution (the employee contribution limit for those under 50 in 2025), you could effectively earn an extra $23,500 from your employer's matching contributions this year — which would be yours to keep even if you left your job the day your last contribution came in.

Such a generous match is not available to most of us.

"A dollar-for-dollar match up to 5% of an employee's salary is considered a good, and fairly common, employer contribution," explained Brad Clark, investment adviser representative and founder of Solomon Financial.

Vanguard's new How America Saves (PDF) report also reveals more details about what the typical match looks like. According to Vanguard, these are the most common characteristics of 401(k) match programs.

• Half of all Vanguard plans offered only an employer-matching contribution.
• 36% of plans provided a matching and non-matching employer contribution (referred to above as a non-elective contribution).
• 10% of plans offered only a non-matching contribution.

earnedAmong employers offering matching funds, the average match was 4.6% of pay, and the median match was 4%. Among plans with non-elective contributions, the average contribution was 5.3% of pay, while the median was 4.5%.

Our $100,000 earner, who received the average match and no non-elective contributions, would have been able to earn just $4,600 in matching funds from their employer, assuming they contributed enough to earn the full match.

Most employers also did not offer a dollar-for-dollar match. The most common formula used was 50 cents per dollar on the first 6% of pay; the table below shows the matching formulas used across all plans.

Here is how Vanguard characterizes the most common match formulas.

What does this look like in the real world?

Consider our $100,000 worker again. If they earned a match worth just 50 cents per dollar on the first 6% of pay, the total match they'd be eligible for would be $3,000, and they'd have to contribute $6,000 to get it.

Although this is less generous, it can still accumulate over several years. Of course, any match is still worth claiming.

"A good match is huge," Clark said. "The impact of an employer match is colossal. If you contribute 5% and your employer matches it with another 5%, your account is receiving a full 10% contribution annually.

Clark explained that a 30-year-old contributing $5,000 per year to a 401(k) would accumulate $1,490,634, assuming a 10% annual return until age 65. With the employer's $5,000 match, the total yearly contribution doubles to $10,000, and the account's future value doubles to an astonishing $2,981,268.

"The employer match isn't just extra money — it's the difference between a nice retirement and financial freedom," Clark said.

It's also important to note that the amount of the match the worker gets to keep depends on their vesting schedule, as well as how soon they leave work.

Still, this means a substantial number of employees had to wait longer to own their matching funds, with one in four plans using either a five- or six-year graded vesting schedule.

The beauty of a 401(k) match

How does your company's 401(k) match compare to the average and most generous plans? Hopefully, your company is as generous as the ones that made the top ten list.

If not, you should still claim all the matching funds you can, as doing so could make all the difference in your retirement security.

Get the full story: Just how 'average' are your finances?

Want to see how more of your retirement portfolio compares to peers? Read:

• The Average Net Worth by Age,
• Average Retirement Savings by Age,
• The Average IRA Balance by Age and
• Average Social Security Check by Age.