Major Companies Reduce 401(k) Match

By Heather Taylor0 Comments

Employees at companies from Facebook to Oracle are noticing that they’re not saving as much for retirement as expected. Bloomberg reports that some employers decreased the portion of the contribution match that they provide to employees’ 401(k)s.

“The most frugal have been scaling back company matches and setting lower limits for the maximum annual payment they’ll make to a 401(k) account, according to hundreds of government filings analyzed by Bloomberg. A difference of three percentage points on a match can add up to hundreds of thousands of dollars lost for employees over the course of their careers.”

The article further explains that other companies changed their 401(k) match schedules to contributions of one lump sum per year rather than in every paycheck. This affects employees’ compounded returns.

This news provided additional reasons for those saving for retirement to consider diversifying their retirement portfolio outside of their employee-sponsored plans. Some turned to self-directed retirement accounts, which gave the investor more control over their investments by allowing them to invest in alternatives to the market, including real estate, tax liens, promissory notes and more. Get more details here.