NEW YORK (TheStreet) -- So you’re not a coupon cutter. You like discounts -- love free stuff -- but you’re not going to go out of your way to score chump change here and there, right? It’s got to be a convenient – and substantial -- payoff to get you motivated.
Now, $1,300 would probably get your attention. And 42 grand, you’re definitely in. That’s the “easy money” that Financial Engines estimates Americans are squandering by not picking the low-hanging fruit in their 401(k).
You’ve heard it before: defer enough savings to earn the company match. But one in four 401(k) investors miss the maximum match by not saving enough. That’s a yearly average of $1,336 in lost earnings per employee or an extra 2.4% of annual income. Bet your raise was less than that this year.
Financial Engines did the math and found that, in a typical scenario, that annual bump in savings would add up to $42,855 in free money over 20 years. And for younger workers, it’s an even bigger number. Compounding the $1,336 at a conservative 4.5%, the additional match would grow to $142,270 over 40 years. In fact, younger workers – who have the most to gain over the long haul – are the least likely to defer enough salary to gain the full company match in their 401(k) plan, according to the study.
All in all, it’s $24 billion in missed retirement riches for savers nationwide – every year. Why are employees, already hard-pressed to save enough for retirement, missing the 401(k) bonus boat?