1 No-Brainer Retirement Savings Move That You'll Thank Yourself for Later

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It’s simpler than you might think to supercharge your savings.

Saving for retirement can be incredibly difficult, and there’s no silver bullet to help you save millions overnight. There’s one simple move, though, that can supercharge your savings with little effort on your part: Take advantage of employer matching contributions.

Effortlessly increase your savings

Many 401(k) plans offer an employer match, which can instantly double your savings. By taking full advantage of this perk, you could increase your savings by hundreds of thousands of dollars while barely lifting a finger.

Image source: Getty Images.

The most common type of match, according to Vanguard’s 2024 “How America Saves” report, is 50% of an employee’s wages up to 6% of their salary. The median wage among U.S. workers in 2023 is around $58,000 per year, according to the Bureau of Labor Statistics. The average match, then, would amount to around $1,740 per year.

That may not sound like much, but it can seriously add up. For example, say that in one scenario, you’re contributing $1,500 per year to your 401(k) and earning a $1,500 annual match. In another scenario, say you’re saving $1,700 per year with a $1,700 annual match. If you’re earning a modest 8% average annual return in both cases, here’s approximately how your savings would add up over time:

Number of Years Total Savings: $1,500 per Year + $1,500 Match Total Savings: $1,700 per Year + $1,700 Match
20 $137,000 $155,000
25 $219,000 $248,000
30 $340,000 $385,000
35 $517,000 $585,000
40 $777,000 $880,000

Data source: Author’s calculations via investor.gov.

In this scenario, contributing just $200 more per year (and earning an extra $200 per year from your employer) could add up to more than $100,000 after a few decades.

Regardless of how much you’re earning or what your employer will match, it can go a long way. By making the most of this perk, you can maximize your savings with far less effort.