An employer 401(k) match is money your employer contributes to your 401(k) retirement account based on how much you contribute yourself. It is one of the most valuable benefits a job can offer — effectively part of your pay.
How a match works: the employer agrees to match your contributions up to a limit. A common example: an employer matches 50% of what you contribute, up to 6% of your salary. If you earn $50,000 and contribute 6% ($3,000), the employer adds $1,500. Match formulas vary by employer.
Why it matters so much: a match is an immediate, guaranteed return on what you put in — money you would not otherwise receive. Not contributing enough to get the full match is often described as "leaving free money on the table."
Vesting: some employers require you to stay for a certain period before the matched money is fully yours — this is called a vesting schedule. Your own contributions are always 100% yours.
The key takeaway: if your employer offers a match, try to contribute at least enough to receive the full match before directing extra savings elsewhere.
To manage contributions to an RMO-administered plan, see how to change your investment contributions and how RMO 401(k) works.
Investments are not FDIC insured, are not bank guaranteed, and may lose value. RMO Investments, Inc. is a separate entity from RMO Bank. This article is general information, not tax or investment advice.