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Many couples fail to coordinate 401(k) contributions and miss matches

Research highlighted by a Boston College economist found about 20% of couples leave employer matching dollars unclaimed, and adjusting split contributions could add $30 per month from employers.

Reported · Written up by our desk · Residential

Many married couples may be missing thousands of dollars in retirement savings because they do not coordinate how they split workplace 401(k) contributions, according to HousingWire, citing research discussed by Boston College economist Geoffrey Sanzenbacher.

Sanzenbacher said roughly 40% of couples actively coordinate their 401(k) contributions to maximize employer matching, while about 20% leave matching dollars on the table by not allocating contributions between spouses in a way that best captures the available match.

The analysis includes a hypothetical where a household contributes a combined $480 per month. By shifting contribution percentages between spouses to take fuller advantage of one employer’s more generous match, the couple could receive an additional $30 per month from employers without increasing its own savings.

Sanzenbacher added that, over 30 years and assuming a 5% real return, that employer match boost could translate into roughly $25,000 in additional retirement savings. Researchers also found another 40% of couples appear uncoordinated but still receive the maximum available employer match, likely because both spouses independently hit the same match threshold.

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