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No. The way it usually works is you can contribute up to X% of your pay tax advantaged (with a hard dollar cap) to your 401k. The company can match up to Y% pay.

What he is suggesting is that he can contribute 10%. Everything he contributes up to 4% is matched by his company (ie a 4% pay increase). Usually its a little more complicated than that. Like they'll match 1:1 the first 2% and then 1:2 the next 2% for a total of 3% matching funds.

What are typical matches?

In Norway there are no matches. The company just have to pay 2-7% of your salary to your fund each year. For tech jobs it's mostly at the top of the range.

Its fairly variant. As far as I can tell (and I'm no expert) the max is either non-existent or so high that i've never encountered it in the wild. Between 2-5% seems common in my experience.

The companies do not have to do this. It is purely optional, though there is a tax advantage I believe. Most "professionals" have the option at their company.

A bigger problem is that the 401k offerings are fairly bad usually. The people picking them are HR staffers who frequently don't have experience in finance, so the plans frequently have murderously high expense ratios. Even to the point where some companies repackage Vanguard funds that you can get on the open market for 10x less.

There is a maximum total contribution.


total employee and employer contributions (including forfeitures) - the lesser of 100% of an employee’s compensation or $54,000 for 2017 ($53,000 for 2015 and 2016 not including "catch-up" elective deferrals of $6,000 in 2015 - 2017 for employees age 50 or older) (IRC section 415(c))

So the max is basically 200% match of the individual's contribution, which is maxed out at $18,000 for an individual under 50.

That varies by employer. For professional salaried jobs usually 3-6% from my experience.

Many companies are doing odd things now with half percentage matching. So they will say they match all of the first 4% and then the half of the next 2%.

It varies widely. I have had nominal 3-6% matching, but it was capped at an absolute dollar amount. That amount made the effective match more like 1.8-3.8%.

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