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Would You Take a Lower Salary for a Bigger 401(k) Match?

More than four out of 10 employees (43 percent) say that they would take a lower salary if they were offered a bigger employer contribution to their 401(k) retirement plan, according to a new Fidelity Investments study. Perhaps even more surprisingly, only 13 percent said they'd take a six-figure salary with no 401(k) match from their employer.

More than four out of 10 employees (43 percent) say that they would take a lower salary if they were offered a bigger employer contribution to their 401(k) retirement plan, according to a new Fidelity Investments study. Perhaps even more surprisingly, only 13 percent said they’d take a six-figure salary with no 401(k) match from their employer.

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According to the survey of 1,026 people, 25 and older, who were employed and contributing to a workplace retirement plan, 42 percent of them are not saving in any way for retirement other than their 401(k). This partly explains why employees are more inclined to take a lower salary now to save for later.

Do You Know What You're Worth?

When survey respondents where asked, hypothetically, to “imagine you were offered a new position. Which one of the following compensation structures would you prefer?” just 13 percent responded that they’d accept a $100,000 annual salary if the employer made no contribution to their retirement savings.

However, 27 percent of workers chose a $90,000 annual salary combined with a $10,000 employer contribution to their retirement savings. Another 34 percent of workers wanted a $75,000 annual salary and a $25,000 contribution to their retirement savings, and 23 percent chose a $50,000 annual salary and $50,000 contribution to savings.

Of course, that’s all just hypothetical. Whether these respondents — or you — would really choose a lower salary in exchange for more money set aside for retirement ultimately comes down to whether you could actually live with a lower salary now in exchange for the peace of mind of financial security years down the road. 

Regardless of what your personal financial goals are, it’s a good idea to read up about potential employers before you head into the interview process. PayScale’s Career Research Center is a good place to find out what benefits and pay look like at any given company. 

Tell Us What You Think

Would you accept a lower salary for a bigger 401(k) match? ? We want to hear from you! Leave a comment or join the discussion on Twitter.


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What your study does not care to look at is: Is this consistent across different salaries? There is not much difficulty living on 50k with 50k in retirement or 75k salary with 25k retirement, but would this be the same for a 60k salary? Who would give 30k to salary while saving 30k? All this is hypothetical, but at a more reasonable salary, the outcome would be different.

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