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Take Less Salary For More 401(k) Cash?

Poll QuestionA new survey from Fidelity Investments has found that four in 10 American workers would accept a lower salary for a higher employer contribution to their 401(k).

What’s more, only 13% of the 1,027 over-25 workers surveyed said they would take a job without a company match, even if the salary was higher.

While we’re impressed with the dedication to retirement savings that this and other recent studies have shown, we’re also a bit perplexed.

The big question Fidelity Investments didn’t ask was exactly how much salary these workers were willing to sacrifice.

We ask because, according to Fidelity 401(k) data, the average employer contribution was 4.3% as of June 30, with employers contributing an average of $3,540 per employee annually.

Sure, that’s more than $1,000 higher than the average employer contribution 10 years ago. And sure that can add up, but we’re hoping those 40% of workers are carefully considering a significant cut in annual pay.

And then there’s this:

“Employer contributions play a vital role in helping Americans reach their retirement savings goals – these contributions represent more than 35% of the total contributions on average to an employee’s workplace savings account,” said Doug Fisher, senior vice president of Workplace Investing at Fidelity.

Fidelity 401(k) data reveals that 79% of workplace savings plans offer an employer contribution, such as a 401(k) match or profit-sharing.

Don’t get us wrong. We love a match. If you have one, you absolutely have to take advantage of it.

But we’re wondering what that match is worth to our readers. And does it have to be a 1:1 match?





How much lower of a salary would you take for a higher 401(k) match?
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