[hartard]

Google matches the greater of something like 100% of $3000 - or - 50% of the max employee contribution.

A 100% match from Microsoft would mean an annual 2015 contribution of $36,000 ($18,000 employee + $18,000 employer match) versus $27,000 maximum ($18,000 employee + $9,000 employer match) from Google. That's a $9000 difference.

EDIT: Looks like the article is incorrect. Correct numbers are 50%, as stated in parent comment.

[jacalata]

They mean they are matching your entire contribution at 50%, not part of your contribution at 50%

[FatalErrorr]

You're wrong. MS does 50%.

[inspectahdeck]

Well, the article is wrong. Here's Microsoft's actual announcement:

https://blogs.microsoft.com/blog/2015/08/05/the-employee-exp...

[hartard]

You are correct. The article incorrectly quoted the source:

"we’ll increase the company’s 401(k) match from 50 percent of the first 6 percent that employees defer, to 50 percent of all regular deferrals. With the current IRS regular deferral limit of $18,000, this means employees will have the opportunity for Microsoft to match their contributions up to $9,000 per year."

[rconti]

Nobody knows. Microsoft's own release makes no sense. You (and your employer, combined) cannot contribute more than $18,000 tax-free per year. It's either 100% match of $9,000 on your $9,000 to make $18,000, or it's 50% match of your $12,000 to make $18,000. It can't be both things that the press release says it is.

My best guess is that they meant to say they now match 100%, but we won't know for sure until they correct the press release.

[rhc2104]

Actually, employer contributions do not count towards the $18k maximum per year in contributions. This is the specific advantage of having a 401k match in the first place, as it allows employees to have more tax deferred savings than otherwise possible.

Source: http://www.bankrate.com/finance/retirement/employer-match-co... (Technically, with employer match, it can go up to $53k)

[toomuchtodo]

Can also go up to $53K with after tax employee contributions, which can be rolled out into a Roth IRA upon separation from the employer.

[gamblor956]

Read the announcement. MS now does 100% matching.

[turk-]

No. They are increasing from 50% of 6% to 50% of all deferrals. So the maximum before was like $540 if you put in $18,000. Now its $9000.

"Retirement readiness is an important part of overall financial wellness, so beginning Jan. 1, 2016, we’ll increase the company’s 401(k) match from 50 percent of the first 6 percent that employees defer, to 50 percent of all regular deferrals."

[twoodfin]

I don't think that's plausible. More likely the match was 50% of the first 6% of salary employees deferred. That would require an employee to earn $300,000 in order to see a maximum $9,000 match. Now an employee can receive the full match merely by deferring the maximum amount, regardless of their salary.

[nlawalker]

6% refers to 6% of salary, not 6% of deferrals. 401k contributions are measured in terms of percentage of pre-tax salary contributed, and the match is based on that.

Under the old scheme, you had to contribute at least 6% of your pre-tax salary to get the maximum match, which was 50% of whatever that value was. In other words, the maximum match was 3% of your salary, and you had to be contributing at least 6% of your salary to get that. Now, anything you contribute gets matched at 50%, regardless of what your salary is.

[gdc]

You are completely wrong.

Pretend I made $100k, contributed $6k -- they matched an additional $3k into the account.

The match was considerably more than $540 @ $18k.

Source: I work there.

[rconti]

That's not allowable under law. The max is $18k (unless you're subject to the catch-up provisions over age 50 or 55 or whatever it is).

[danhak]

You're incorrect. Employers are allowed to contribute to an employee's 401K plan up to a $53,000 combined limit. The $18K limit applies only to employee contributions.

[encoderer]

The employer match does not count towards the $18k limit.

[guelo]

Unrelated, but Wall Street parasite fees do count towards your contribution limit. And 401k plans mostly offer high fee funds. So be careful or you might think you're contributing $18k but you're actually only contributing $17k and making an annual $1k gift to some some banker's bonus. Also, 401k is a massive Wall Street scam.