The best retirement plans are typically those at companies that offer to match their employees’ 401(k) contributions.
The way it works in most cases, although the specific numbers will vary, is that the employer contributes up to a certain percentage of the amount their workers set aside in their retirement accounts.
Report: These Companies Offer the Best Retirement Plans
Money expert Clark Howard says it’s one of the best ways people can invest — the amount that your employer matches is essentially free money. But if you haven’t done it before, it’s easy to become intimidated.
“Investing can seem so complicated that you might shut down and do nothing about it — or feel you need to hire someone to guide you,” Clark says. “However, it doesn’t need to be complex. You probably already have the opportunity to get started right where you work.”
Indeed, many employers offer 401(k) plans — but which companies offer the best ones? Believe it or not, some companies will even contribute to your retirement whether or not you set aside any of your own money.
To that end, U.S. News recently released a report that shows the five best company-sponsored retirement plans. Let’s take a look at how generous they are:
5 of the Best Company Retirement Plans
|Amgen||5% of salary regardless of employee contribution + 100% match on the first 5% of eligible salary saved by employee|
|Boeing||3-5% automatic 401(k) contribution + 75% match on first 8% of eligible salary|
|BOK Financial||Up to 6% salary match based on years of service. From 50% match for workers under 4 years of service to 200% match for those employed 15+ years|
|Farmers Insurance||4% of eligible pay whether employee contributes or not + dollar-for-dollar contribution match up to 6% of eligible pay|
|Ultimate Software||45% match for every dollar employees contribute to 401(k) with no limits on the match except for the IRS contribution cap|
If you haven’t set up a retirement account, now is a good time. The contribution limit is $19,500 for 2020, according to the IRS.
Meanwhile, the additional amount those over age 50 can pay in catch-up contributions is $6,500.
Clark: Stick to Your Retirement Strategy
Clark says that the key to a great retirement strategy is to stick to it. After all, it’s your responsibility to provide for your future.
“When you get right down to it, you are the only one who can provide for your retirement,” Clark says.