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Are You Leaving Free Money on the Table? -Check Your 401(k) Contributions

Are You Leaving Free Money on the Table? -Check Your 401(k) Contributions

As we settle into the new year there are several financial items to ‘check on’.  One of those being your 401(k) contributions.  If your employer offers a match and you’re not contributing enough to get the full amount, you’re essentially leaving free money on the table.

What’s an Employer Match?

Many companies offer to match a percentage of your 401(k) contributions, typically 3% to 6% of your salary.  For example, if your employer matches 100% of contributions up to 5% of your salary and you earn $100,000, that’s an extra $5,000 in your retirement savings each year just for contributing!

Review Your Investment Selections

Contributing to your 401(k) is only part of the equation, you also need to make sure your money is working for you.  Many plans default new participants into target-date funds, which may or may not align with your risk tolerance and goals.

  • Assess Your Risk Tolerance: Are you comfortable with market fluctuations, or do you prefer a more conservative approach?  Your mix of stocks, bonds, and other assets should reflect that.
  • Diversify Your Investments: Avoid putting all your eggs in one basket by spreading your contributions across different asset classes.
  • Rebalance Regularly: Market movements can shift your allocation over time, so reviewing your portfolio at least once a year helps maintain your desired risk level.

A well-diversified, appropriately allocated portfolio can have a significant impact on your long-term returns—don’t just “set it and forget it.”

How to Maximize Your Contributions

  • Meet (or Exceed) the Match – At a minimum, contribute enough to get the full employer match.
  • Increase Contributions Gradually – If maxing out your 401(k) ($23,500 in 2025, or $31,000 if you’re 50+) isn’t feasible, increase contributions by 1% each year.
  • Check Your Paycheck – Some plans stop employer matching once you hit the IRS limit too early in the year.  A steady contribution strategy ensures you get the full match.

Why This Matters

By not taking advantage of an employer match, you’re missing out on a guaranteed return on investment.  Over time, even a few extra percentage points can significantly impact your retirement savings, thanks to compounding growth.

Take five minutes to log into your 401(k) portal today and ensure you’re making the most of your contributions and investments.  Future you will thank you!

Not sure if you’re on track? I’m happy to review your 401(k) strategy and help you maximize your savings. Give me a call, and let’s make sure you’re set up for success.

Written By: Steve Cartwright, CFP®

Disclosures
This blog contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in this blog will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. The information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security.  Per Stirling Capital Management does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance.  Past performance is no guarantee of future results.
Risk tolerance is an investor’s general ability to withstand risk inherent in investing. The risk tolerance questionnaire is designed to determine your risk tolerance and is judged based on three factors: time horizon, long-term goals and expectations, and short-term risk attitudes. The adviser uses their own experience and subjective evaluation of your answers to help determine your risk tolerance.
There is no guarantee that the risk assessment questionnaire will accurately assess your tolerance to risk. In addition, although the advisor may have directly or indirectly used the results of this questionnaire to determine a suggested asset allocation, there is no guarantee that the asset mix appropriately reflects your ability to withstand investment risk.
Diversification does not guarantee a profit or protect against a loss in a declining market.  It is a method used to help manage investment risk.
Rebalancing/Reallocating can entail transaction costs and tax consequences that should be considered when determining a rebalancing/reallocation strategy.

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