Are you leaving money on the table?

Are you leaving money on the table

If your employer (or your spouse’s employer) offers a match in your 403(b) or 401(k) plan, take it. It’s free money.

While matching contributions have been popular in the private sector for years, it is a fairly new trend in benefits offered by Wisconsin public schools. More and more districts are offering a match to incent staff to save for retirement and to make their employee benefits package more attractive to potential recruits as well as veteran staff.

Let’s lay it out for you

The match varies from employer to employer. It might be 50 cents or a dollar for every dollar you contribute up to a set maximum—perhaps 3% to 6% of your salary—or in some cases, a dollar limit.

Matching funds usually vest over time, meaning the matched funds aren’t all yours until you’ve completed the vesting period—typically three to five years. Once you’re fully vested, you can take the entire employer match with you should you part ways. However, if you leave before you’re fully vested, you may get to keep only a portion of the match or maybe none at all. It depends on the employer plan.

But, all the money you contributed is still yours.

Don’t leave money behind

Ironically, this benefit is underutilized and many employees are leaving money on the table. With continued changes to post-employment benefit packages in both the private and public sectors, employees will need to rely more on personal savings to fund retirement. Do it the easy way. Never pass up the opportunity to get free money from a match.

As an added bonus, the match effectively increases your income without increasing your tax bill, since you pay no taxes on matching contributions until you withdraw them in retirement.

Contact your district today

Check with your district’s business office or benefits department to see if your district offers a matching or vesting opportunity. If your district offers the benefit and you qualify, be sure to take advantage of it.

Have more questions about matching and vesting in your 403(b) account? Give us a call at 1-800-279-4030.

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