Daily Money - There’s No Money Like Free Money

I wouldn’t turn down free money, and neither would you. But every year, slightly fewer than a quarter of employees who have access to a 401(k) at their job do just that.

Most workers who contribute to their 401(k) also receive some contribution, a/k/a the company match, from their employer. And most who save through their workplace plan — 78% — made sure they put in enough to get the full match, according to Fidelity’s Q1 retirement analysis. That leaves 22% of people who either aren’t saving the amount needed to get that match or, worse, aren’t participating in their workplace plan at all.

Hopefully, you’re not one of them. Saving for retirement is a marathon you run over several decades, and it requires a lot of different behaviors. If you have access to a workplace plan, use it. If your employer offers a match, try hard to save enough to get it. That’s an important way to give some extra oomph to your retirement savings — which is why it’s such an oft-repeated piece of retirement savings advice.

Generally, most U.S. adults seem to greatly value the company retirement plan. In fact, more workplace plan participants say they’d choose a higher employer match (57%) over more paid time off (43%). It looks like employers are getting the memo: Fidelity found employer 401(k) contributions just hit a record high, with an average contribution of $1,950 in the first quarter of 2023, up from the previous high of $1,860 a year ago. That’s great news for retirement savers of any age. When it comes to money, it’s hard to beat free.

For more on the record amount of money landing in employees’ 401(k) accounts, read our reporter Brenden Rearick’s story.

— Jill Cornfield, deputy editor

Common retirement regrets have to do with investment choices, not paying off debt and not saving enough, according to a survey of retirees by Lincoln Financial. Just over a third said they would choose investments to supply a steady income stream (36%) and pay off debts sooner (34%). A quarter said they would have planned better for increased costs due to inflation. But the biggest shared regret has to do with when  people began to save for retirement, with three-quarters of retirees saying they wish they had started earlier.

• Imagine being this close to retirement, only to find out you need three more years of active service.
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• The most important number to predict your retirement quality of life? It might just be your ZIP code.

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