FINRA Investor Alert Urges American Workers to Take Advantage of 401(k) Match

WASHINGTON — The Financial Industry Regulatory Authority (FINRA) today issued Why Leave Money on the Table—Make the Most of Your Employer's 401(k) Match to encourage greater 401(k) contributions by the nearly 30 percent of American workers who are not contributing enough to receive their full employer match. In order to help employees meet their retirement goals, many employers match a worker's 401(k) contributions. One of the most common matches is a dollar-for-dollar match of up to 3 percent of the employee's salary. FINRA is issuing this Investor Alert because too few workers are taking advantage of a simple benefit that can help them meet their retirement goals.

According to a recent study, nearly three in 10 workers (29.4 percent) do not contribute enough to their 401(k) to receive their full employer match. Younger workers are even more likely to leave money on the table, with 43 percent of workers age 20-29 failing to contribute to the full extent of their employer's match. An earlier study showed that 40 percent of employees making less than $40,000 fall short of contributing the full extent of their employer's match. Millions of workers, especially younger and lower income workers who need it most, are leaving money—free money—on the table.

"Even in tough economic times, all employees still need to prepare for their retirement. Taking full advantage of a company's 401(k) match is a no-cost way for workers to boost their retirement savings," said Gerri Walsh, FINRA Vice President of Investor Education. "Employees who contribute less than their employers are willing to match are walking away from free money."

Why Leave Money on the Table illustrates how dramatically 401(k) matches can boost retirement savings, discusses the tax benefits of participating in a 401(k) plan and guides readers to FINRA's Smart 401(k) resources.

FINRA, the Financial Industry Regulatory Authority, is the largest non-governmental regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. FINRA touches virtually every aspect of the securities business - from registering and educating all industry participants to examining securities firms, writing and enforcing rules and the federal securities laws, informing and educating the investing public, providing trade reporting and other industry utilities, and administering the largest dispute resolution forum for investors and registered firms. For more information, please visit our website at www.finra.org.