Starting a new job is stressful.
For one woman, that ignorance added up to a six-figure financial mistake.
“I found out, after having worked for my company for many years, that I was leaving behind 100% match on my 401(k),” Teresa Greenip tells Fortune.
After landing a job at a commercial real estate firm, she neglected to take advantage of a retirement savings plan with a match program that in total would have been $60,000 in free money. Had it grown with her contributions at an average return rate, she would have amassed over $500,000 in retirement savings.
Making this “gigantic money mistake” was a wake-up call for Greenip, but it’s a situation that is not all that uncommon.
When Greenip graduated from Emory University in 2004, her heart was set on a high-paying career in the corporate finance world.
Gradually investing in a 401(k) can be life-changing by the time retirement arrives—and the earlier you contribute, the greater the compounding. Employers commonly match up to 50% of an employee’s 401(k) contributions, up to a maximum of 6% of their salary. For someone making $80,000 who begins contributing to their 401(k) at age 25, they could gain over $300,000 in employer contributions alone, which can compound over their lifetime into millions of dollars.
If you are unsure whether your company has a 401(k) match policy, experts say contact your human resources team as soon as possible. If you haven’t checked on your 401(k) in a while, it is always a good idea to make sure everything is invested properly.
She encourages all individuals to take stock of their inflows and outflows—and then set spending goals for a given year. Only then should you begin taking the baby steps of paying off debt and investing funds in brokerage or retirement accounts.
“All of this advice is not just for the wealthy, but it’s for all of us, and the government has set up the rules to benefit all of us, to encourage us to save and invest,” Greenip says.
“I think everybody can benefit from constantly revisiting their financial strategy,” she adds.
