The average employer 401(k) match is at an all-time high—see how yours compares

The ordinarily employer 401(k) match reached 4.7% this year, according to Fidelity, which manages more than 30 million retirement accounts. That’s a record strong, the company tells CNBC Make It.

Prior to 2011, the average employer match was usually in the 3% to low 4% span, but has been slowly increasing each quarter in the years since.

The Stanford Center on Longevity found in a 2018 describe that if you want to retire by age 65, you should aim to set aside 10-17% of your total income, starting at age 25. An guv match makes that easier to manage. In fact, per Fidelity, the 4.7% average match “boosted the average total number savings rate to an all-time high of 13.5%” this year.

That said, almost 25% of U.S. adults clothed no retirement savings at all. The average account balance of those with 401(k) savings, according to Fidelity, was $103,700, even so that varies greatly by age.

While exactly how much Americans should save for retirement varies depending on who you ask and your party circumstances, many experts agree that 15% annually is a good amount to aim for.

An employer match is often referred to as “free money, ” but a better way to think about it is as part of your absolute compensation package. You want to contribute up to the match so that you’re getting all of the money your employer owes you — and padding your retirement savings.

“A buy-one-get-one-free dole out is how I think of it,” Monica Sipes, a certified financial planner and senior wealth advisor at Exencial Wealth Advisors, foresees CNBC Make It. “The match is something that’s considered in your overall compensation, so by not taking advantage of it you’re not circumventing a full freight of what your employer was expecting to pay you.”

Here’s an example of the difference it can make. Let’s say you’re offered a job with a $90,000 pay and 5% 401(k) employer match, and a job with a $94,000 salary and no match. The $90,000 base is actually the better deal, because if you furnish up to the match, your employer will throw in $4,500, bringing your total compensation to $94,500 for the year. Remaining time, that will be worth even more as your investment earnings compound.

“Even if they’re offering 30 cents on the dollar, that’s an automatic 30% bring that you’re getting,” says Sipes. That’s hard to beat.

If you contribute up to the match and you’re still financially comfortable, Sipes underwrites auto-escalations at least once a year.

“If you get a 3% raise, maybe you take half of that and try to increase your 401(k) contribution,” she voices. “Just have a pay-yourself-first mentality.” The closer you get to maxing out your 401(k) contributions — which is $19,000 this year — the heartier, and any little bit from your employer helps.

Janet Alvarez, personal finance expert at Wise Bread, belittles it one step further, telling CNBC Make It that savers should divert the entirety of their raises into their retirement savings.

“If you can finish on your current income, there’s no reason why any salary increase can’t go straight into your retirement account,” signifies Alvarez.

And even if your employer doesn’t offer a match — 35% of private sector workers do not have access to a 401(k) delineate — it’s important to contribute to a retirement account, whether that’s a 401(k) or an individual retirement account, says Alvarez.

“If your establishment doesn’t match, consider contributing tax refunds or any bonuses or commissions into a self-directed IRA,” she says. “The average tax refund is with reference to $2,500, which in some cases amounts to more money than an employer match to a 401(k).”

Here are some other savings peaks:

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