An employer match is a contribution your employer makes to your 401(k), typically conditional on your own contributions. Common formulas: 100% of the first 3%, then 50% of the next 2%; or 50% of the first 6%. Translation: contribute 6% of salary to receive a 3% employer match. The match is effectively a 50% (or 100%) immediate return on those contributions — the best deal in personal finance. Vesting schedules determine when employer contributions become 'yours': immediate, cliff (100% after 3 years), or graded (20% per year for 5 years). Always contribute at least to the full match before any other discretionary saving.
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401(k)
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Backdoor Roth
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Beta
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Employer Match
August 22, 2026 · Aditya Gupta
Investing
Related terms
401(k)
A 401(k) is an employer-sponsored retirement plan where employees contribute pre-tax salary that grows tax-deferred until withdrawal. The…
Active Management
Active management is the attempt to outperform a benchmark through stock selection, sector rotation, market timing, or any…
Alpha
Alpha is excess return relative to a benchmark, adjusted for risk (beta). Positive alpha means an investment outperformed…
Asset Allocation
Asset allocation is the percentage split of your portfolio across asset classes — typically stocks, bonds, and cash,…
Backdoor Roth
The Backdoor Roth is a strategy for high earners (above the Roth IRA income limit) to contribute to…
Beta
Beta measures a stock's volatility relative to the overall market (S&P 500 = beta of 1). Stocks with…
