Many companies today offer a 401K match as a part of their benefits. Don’t discount its value because it’s like getting free money toward your retirement. Even though you can’t see/use the funds now, you’ll appreciate it when you’re in your golden years and no longer want to work.

How Employers Offer a 401K Match

Employers offer different 401K match options – it’s not a one-size-fits-all approach. Some may offer a 3 percent contribution regardless if you contribute or not. If you make $50,000 per year, that means your employer will add $1,500 to your 401K each year.

Others offer a more hybrid approach. It may look like 100 percent of the first 4 percent of your salary that you contribute and 50 percent on the additional 2 percent of your salary that you contribute. Each company has a different structure, so make sure you understand what’s being offered to you and how it works out financially.

Top Companies for 401K Match

Companies don’t have to match your 401K contributions, but many do and they do it well. The companies below are among the companies that offer the highest 401K match.

Southwest Airlines

Southwest offers a dollar-for-dollar match on up to 8.3 to 9.3 percent of your salary. If you make $75,000 per year, that means they’ll match between $6,225 and $6,975 per year. Southwest’s 401K offers a large variety of investment options and allows employees to roll over their 401K from previous employers.

Amgen Inc.

Amgen also makes a sizeable contribution to your 401K even if you don’t contribute anything. All employees receive 5 percent of their salary. If you contribute, they will also match up to 5 percent of additional contributions, for a total of 10 percent contributions from the company.

Citigroup Inc.

Citigroup matches your contributions up to the first 6 percent of your salary. They may also contribute an additional 2 percent. Citigroup makes their contributions in one lump sum at the end of the year rather than monthly with your contributions.

Boeing

Boeing recently switched all employees over to a 401K versus a pension. They contribute 75 percent of the first 8 percent of your salary in matching contributions. They also contribute an additional contribution between 3 and 5 percent of your annual salary based on your age.

Farmers Insurance

Farmers are another company that contributes to your 401K even if you don’t. They provide 4 percent of your salary as a contribution. They also contribute an additional 6 percent of your salary as a dollar-for-dollar 401K match if you contribute.

If your company offers a 401K match, take it! If you have to contribute to get it, make sure you work that into your budget. Your 401K plays an important role in your retirement income. It will likely supplement your Social Security income since most people can’t afford to live on Social Security alone. Work with an advisor to ensure that you put enough away to live the life you plan during retirement.

Rahul Iyer