Imagine a young married couple. One partner invests heavily in his employer’s 401(k), saving for both spouses. The other focuses on paying the bills and contributes nothing to her retirement plan, missing out on the employer’s matching funds.
That was how Niv Persaud and her husband handled their finances.
“My income was going toward our expenses, and he was going to focus on retirement,” she said. “And I had a great company match, and I didn’t pay attention to that.”
The marriage eventually ended. Three decades later, Persaud works as a certified financial planner in Atlanta. Her lost retirement savings provide a cautionary tale.
How much potential savings did she lose?
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“I don’t even want to think about it,” she said.
Married couples don’t maximize 401 (k) matching options
In fact, one in four married couples fails to take full advantage of employers who make matching contributions to 401(k) retirement plans, a recent study found. The oversight costs them nearly $700 a year, on average.
Nearly two-thirds of American workers have access to an employer-sponsored defined contribution retirement savings plan, according to the paper, titled “Efficiency in Household Decision Making: Evidence from the Retirement Savings of U.S. Couples,” and released in April by the National Bureau of Economic Research.
Most plans offer a match: The employer contributes to a 401(k), matching some or all of the funds paid…
