What Is Employer Match? Meaning & Example
Definition
An employer match is money your employer adds to your retirement account when you contribute. It is often described as free money because it boosts your savings at no extra cost to you.
Related terms
A 401(k) is a US employer-sponsored retirement account that lets workers invest part of their paycheck with tax advantages. Many employers add matching contributions.
Compound InterestCompound interest is interest earned on both your original money and the interest already added to it. Over long periods it can make savings grow much faster than simple interest.
Tax-Advantaged AccountA tax-advantaged account offers tax benefits such as deductions, tax-deferred growth or tax-free withdrawals. Rules and limits vary by account type and country.
What is Employer Match?
An employer match is money your employer adds to your retirement account when you contribute. It is often described as free money because it boosts your savings at no extra cost to you.
Can you give an example of Employer Match?
With a 50% match up to 6% of salary, contributing $3,000 could bring an extra $1,500 from your employer.