Some companies encourage employee contributions to their retirement plans by offering a match up to a certain percentage. Many employers give 50 cents of every dollar up to 6% of an employee’s 401(k) contributions. But what do you do if your employer does offer a match? Here are some options to consider.
Put the heat on available investments
Take maximum advantage of what is available to you:
- Contribute more – Put a higher percentage of your income into your existing retirement plan. Since it’s tax deferred, it may be cheaper than you think.
- Try other tax-deferred options – Consider opening an individual retirement account (IRA), if you’ve reached the maximum contribution level in your employer-sponsored plan.
- Consider getting taxed up front – Contributions made to a Roth IRA are taxed now, but qualified Roth earnings are never taxed.
Invest at home
- Purchase a home – Mortgage interest offers a potential tax deduction. Plus, the equity you build can be invested toward your next house and eventually toward retirement, assuming that the value of your home doesn't drop.
- Upgrade your home – If you already own a home, make strategic updates to increase resale value.
Urge your employer
Determine the dollar amount of a potential employer match, then consider it part of your overall compensation:
- Request a raise – It may or may not work, but it’s certainly worth asking.
- Ask your employer to consider starting a matching program – Remind them it may help attract new talent and increase plan participation.
- Compare job offers – The next time you interview, be sure to ask about all available benefits, including the employer match. If you’re not offered one, consider negotiating a higher salary to make up for the loss.