Employer match
Money an employer adds to your retirement account when you contribute — a formula worth translating into dollars once, carefully.
An employer match is money an employer deposits into your retirement account when you contribute to it. The formula is usually written in shorthand — "50% of the first 6%" — that translates as: for every dollar you contribute, up to 6% of your salary, your employer adds fifty cents.
A worked example. On a $60,000 salary with a 50%-of-first-6% match, contributing the full 6% is $3,600 a year from your paycheck; the employer then adds $1,800. Contributing only 3% draws $900 in match instead — the other $900 is simply never paid.
Two mechanics worth knowing. Employer contributions may vest on a schedule, so leaving before it completes means keeping only the vested portion. And matches are typically calculated per paycheck, so front-loading contributions early in the year can shrink the annual match at plans without a "true-up" provision. The formula that matters is the one in your specific plan documents.
Plumb is financial education, not financial, investment, tax, or legal advice.