How do I capture every dollar of my employer's 401(k) match?
Retirement
Contribute at least the percentage your employer matches, every pay period of the year. Front-loading too aggressively can actually cost you the match unless your plan offers a true-up.
The free money most people leave on the table
If your employer matches 100% of the first 5%, that's a guaranteed 100% return on those dollars. Vanguard data suggests roughly 1 in 5 workers contributes below the match threshold, leaving thousands per year unclaimed.
The front-loading trap
Many high earners try to max out early in the year. If your plan does not have a 'true-up' provision, hitting the $24,500 limit by July could mean missing the match for the rest of the year.
Vesting schedules to know about
Your contributions vest immediately. The match may follow a 3-year cliff or 6-year graded schedule. Leaving before fully vested can forfeit unvested matching dollars, factor that into job-change timing.
What people often get wrong
- Contributing 4% when the match is 5%
- Front-loading without confirming the true-up policy
- Leaving a job 30 days before a vesting cliff
What to think about next
- Confirm your match formula and your plan's true-up policy in writing.
- Adjust your contribution % so you hit the limit at year-end, not mid-year.
- Review your vesting schedule before any planned job change.
When to consider working with a CFP®
Working with a CFP® can help when these decisions feel intertwined, taxes, investments, cash flow, and life goals tend to move together, and a planning relationship can offer structure, prioritization, and accountability over time.
Frequently Asked Questions
What is a 'true-up'?
A provision where the employer recalculates the match at year-end and contributes any difference you missed by maxing out early. Not all plans offer it.
Talk to a CFP® who works with high earners.
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