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Couples are leaving about 20% of 401(k) matching funds on the table
Research cited by Boston College economists found roughly one in five couples miss matching dollars because they do not coordinate how they split contributions between spouses.
Many married couples may be missing out on retirement savings by not coordinating how they contribute to workplace 401(k) plans to fully capture employer matching, according to analysis highlighted by Boston College economist Geoffrey Sanzenbacher, via HousingWire.
The research found about 40% of couples actively coordinate their 401(k) contributions to maximize employer match funds, while roughly 20% leave matching dollars unclaimed because they fail to allocate contributions between spouses in the most advantageous way.
Sanzenbacher’s column points to a hypothetical case where a couple contributes a combined $480 per month to retirement accounts, and by adjusting the contribution percentages between spouses to better use one employer’s more generous match, the household could receive an additional $30 per month from employers without increasing its own savings.
Over 30 years, assuming a 5% real return, that shift could translate into about $25,000 in additional retirement savings, the analysis said. Researchers also found another 40% of couples appear uncoordinated but still receive the maximum available employer match.