No match? Save anyway

Dear Liz: Lately I have been reading a lot about how people aren’t saving enough for retirement. Every article I read talks about the need to put enough into employers’ 401(k) programs to get the maximum possible company match. What do you do when your employer doesn’t match your contribution?

Answer: You contribute anyway, and start looking for a better job.

The advice that people should contribute at least enough to get the maximum match is designed to ensure that workers don’t leave free money on the table. That’s essentially what a match is — a free, instant return on your contributions.

Maximizing the match doesn’t mean you’re contributing enough for a comfortable retirement, however. The match may be 50 cents for every dollar you contribute, but most companies won’t match more than 6% of your salary. Most people need to save more than that — sometimes much more, especially if they got a late start.

If your company’s 401(k) doesn’t offer a match, then you will need to save more to make up for the free money you aren’t getting. Because most plans offer a match, though, it may be worthwhile to look for an employer that offers this benefit as it can make retirement saving easier.

To figure out how much you need to save, use a retirement calculator such as the one at the website.


  1. I’m a freelancer and (I’ve been able to max out my Roth IRA for the past few years) even when I had a 401(k), there was no match. I understood the priority for money earmarked for retirement be 1. contribute enough to get the maximum 401(k) match 2. then contribute to an IRA because the funds and fees tend to be better 3. then put any other money earmarked for retirement in the 401(k) even if it is not matched.

    • Liz Weston says

      That’s good advice for higher-income workers, but mostly because they’ll have two different buckets to draw from in retirement–the taxable 401(k) and the non-taxed Roth. The 401(k) plans offered by big companies often have institutional funds that are cheaper and better than those available to retail customers.

  2. “start looking for a better job”

    Liz, Why are you assuming they don’t have a good job? My job doesn’t give a 401k match, but I have a pension and receive, on average, an additional 8-10&% bonus per year, have 4 weeks vacation, not to mention sick days, long and short term disability, and many other monetary benefits. Without knowing more details about the original poster’s situation, you’re making a huge assumption, and could also be very incorrect.

    • Liz Weston says

      Most workers don’t have pensions, so a workplace plan with a match is all the more important.

  3. Thanks for a response, but looking at one item doesn’t necessarily denote that the original writer has a bad job without looking at the entire package. Obviously, they should start saving regardless and I think that point came across.

  4. My employer also doesn’t match my retirement contributions (403b, not 401k, because I work at a nonprofit) – instead, they contribute a fixed percentage of my salary whether I contribute anything myself or not. From the number of people I know whose employers offer similar arrangements, it can’t be that unusual.

  5. I am a fed. I have matching and have consistently contributed enough to get matching in our TOP funds. I also get a pension, and social security if that exists when I can retire in 15+ years. Should I expect this to cover my expenses after retirement or should I find a way to invest more either with my employer or elsewhere? If elsewhere… which elsewhere?

    • Liz Weston says

      Use AARP’s retirement calculator to see if you’re saving enough. If not, you can open an IRA or a Roth IRA at any discount brokerage to invest more for retirement. Kathy Kristof’s “Investing 101” or Eric Tyson’s “Personal Finance for Dummies” are good resources for getting started.(BTW, I wouldn’t buy the type that Social Security is going to disappear. It’s an immensely popular program and even if Congress never gets its act together to make changes, it can still pay 75% of promised benefits. More likely reform will happen and the program will continue to pay what’s promised, although benefits may be trimmed for some future retirees.)

  6. Jerome Barry says

    Hello Liz,

    Maybe I’m letting my enthusiasm get to me, but I’ve learned enough about trading stock options, and had enough success with my small account, that I actually believe and expect that I will make large wins often and small losses occasionally. Being able to do this from home anywhere with electricity and unaffected by high frequency or even deep pocketed traders, I believe that I am on the verge of retirement and prosperity. I’ll show up in the Household Survey as having left the work force. I’ll show up on the SEC’s list of large traders, and on the IRS’s list of the top .1%. Imagine, retiring with $19,000. I am.