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Matching is a lure

Cash isn’t king anymore, matching contributions are.

Workers value 401(k) matching contributions more than cash, so much so that a dollar in 401(k) contributions is twice as effective at luring employees as a dollar in wages, according to a National Bureau of Economic Research survey.

The benefit is preferred among higher-income, older workers, who value employer contributions as much as four times more than regular compensation, the research shows.

The survey showed that employees were willing to forgo 3.4% of wages just to have access to a 401(k), as well as an additional 1.6% in wages for each percentage point of an employer match.

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