The 401(k) Mistake You Can't Afford to Make in 2026

Core Insights - The article emphasizes the importance of maximizing employer contributions to 401(k) plans, which are retirement accounts offered by employers, as many workers do not take full advantage of these benefits [2][3]. Group 1: 401(k) Plans Overview - A 401(k) plan allows employees to defer a portion of their paychecks into retirement accounts before taxes are applied, with a contribution ceiling of $24,500 for the current year, higher for those over 50 [2]. - Many workers do not maximize their contributions due to financial constraints, but it is crucial to at least contribute enough to receive the full employer match [3]. Group 2: Employer Contributions - Most 401(k) plans offer an employer match ranging from 50% to 100% of the employee's contributions, typically up to 6% of their salary [4]. - Fidelity reports that employers contributed an average of $4,920 per employee last year, which is over half of the $9,080 contributed by employees, representing an effective 54% return on employee savings [5]. Group 3: Vesting and Retention - Employees must remain with the company and participate in the 401(k) plan for a sufficient duration to retain all or part of the employer's matching contributions and any investment gains [6].