Bite-Sized Finance

When Someone Offers Free Money, Take It!

If your employer has a 401(k)-matching program, make sure you participate

What if someone wanted to give you free money? Would you take it? The answer to that question should be obvious — “Heck Yeah!”

Especially if all you had to do to earn it was to save some of your own money. Really, that is a win-win scenario. And that scenario is what many employers offer in the form of a 401(k) (or 403(b) or 457) retirement savings matching plan.

Some employers will offer to match your contributions to your own retirement savings plan up to a set dollar amount or a percentage of your salary. If you work for such an employer, there is no conceivable reason not to take them up on the offer.

It is the safest and most lucrative immediate return on your investment dollar that you can possibly get. It is like taking a dollar out of your wallet and showing it to your employer, then they give you another dollar and say, “here, put both of these back in your wallet and save them for retirement.”

That is an immediate 100% return on your investment — not to mention the added bonus of compounding which will apply to both of your dollars over time.

In spite of the obvious benefit, some people neglect to take advantage of this sweet deal. Sometimes it is because they don’t understand what the employer is offering, or the process is too unwieldy, or they feel like they can’t spare their own money for investment.

Don’t be one of those people. The benefit is far too great, and any inconvenience experienced up front will be more than offset by the gains on the back end.

Trust me. Max out any employer retirement fund match. You will be glad that you did.

Timothy Key spent over 26 years in the fire service as a firefighter/paramedic and various fire chief management roles. He firmly believes that bad managers destroy more than companies, and good managers create a passion that is contagious. Compassion, grace and gratitude drive the world; or at least they should. Follow me on , , and , and join the .

Originally published at on February 11, 2021.

Retired from fire service after 26 years. Writer and consultant. I believe compassion, grace and gratitude are contagious and should be spread liberally.

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