Workers missing out on billions in unclaimed 401(k) matches

by Andrea Davis

MAY 13, 2015
11:39am ET

 

While the majority of employers offer a company match on their 401(k) plan, employees are not taking advantage of the benefit, passing up the chance to potentially receive thousands of dollars every year.

 

A new research report from Financial Engines, an investment advising company, estimates that Americans leave $24 billion in unclaimed 401(k) company matches on the table each year.
Financial Engines examined the saving records of 4.4 million retirement plan participants at 553 companies, and found that one-in-four employees (25%) miss out on receiving the full company 401(k) match by not saving enough. The typical employee failing to receive the full match leaves $1,336 of potential “free money” on the table each year, which equates to an extra 2.4% of annual income not received. With compounding, this could amount to as much as $42,855 over 20 years.