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Your employer may make matching contributions which can add money to your 401(k) account. They can do this by matching a portion of your contributions.

How it works

Say you earn $50,000 a year and your employer matches 50% of your contribution up to 6% of your income. If you contribute 6% of your salary ($3,000), your employer will kick in $1,500 more. So contributing at least enough to get the company match is a great way to boost your assets without even “trying.”

Keep in mind that any withdrawals are taxed as ordinary income and, if taken prior to age 59 1/2, may be subject to an additional 10% early withdrawal tax.


Your employer may require you to be in the plan for a certain amount of time to receive 100% of the company match. This is called vesting. If you leave the company before you are fully vested, you may receive only a portion, but not the entire company match. 

Contributing the maximum

You may be eligible to contribute the maximum amount which is limited by tax law. The current contribution limits are available at https://www.IRS.gov.

Catching up

If you're are age 50 or older, you may be eligible to make additional contributions to your retirement account. These are often called “catch-up” contributions. Catch-up contribution limits are also available at https://www.IRS.gov.

Going beyond

If you’ve hit your 401(k) contribution limit and would still like to save more for retirement, you can invest in an individual retirement account. Choose from a Roth IRA (tax-deferred) or a traditional IRA (pre-tax).

No match?

It is important to contribute for your retirement. Keep in mind other opportunities to build for your retirement like an IRA or equity in a home. You might even ask you employer to consider starting a matching contribution to their plan.

Neither Nationwide nor its representatives give legal or tax advice. Please consult with an attorney or tax advisor for answers to your specific questions.

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