Your 401(k) match may not be as generous as it used to be

Employers are acutely aware of the value of helping employees save for retirement, but their recent actions are at odds with that sentiment. For more than 8 in 10 employers, retirement benefits are "extremely" or "very important" for attracting and retaining workers, according to a new report by the Society for Human Resource Management (SHRM). At the same time, however, employer 401(k) matches are shrinking.

Fewer employers offer matches for their 401(k) plans this year (81%) compared with 2025 (85%). And the average maximum employer match for traditional 401(k) plans is 6.11%, down from last year's average of 6.

3%. "Employers are evolving their benefits strategies to meet new workforce realities," Ragan Decker, director of commercial research at SHRM, told Yahoo Finance. The employer match has long been a coveted boost for retirement savers.

And to be clear, most employers are contributing closer to 4.5% on average, according to a recent Vanguard report. "A drop in employer match availability sounds like a crisis, but the real story is that most workers aren't capturing their employer's match," Jeff Judge, a financial planner with Chesapeake Financial Planners in Forest Hill, Md.

, told Yahoo Finance. "If your match shrinks, the answer isn't to panic. It's to raise your own percentage deferral rate to fill the gap," he said.

Set your salary deferral, the amount that you contribute to the plan each paycheck, to capture every dollar of the match your employer offers first. Then, if you can, raise it a bit more to keep your total savings rate steady, Judge said. Learn more about high-yield savings accounts, money market accounts, and CD accounts.

On average, Americans saved 7.6% of their paychecks in their employer-provided retirement plan last year — and nearly half of participants increased their savings rate, according to Vanguard. The annual limit permitted is $23,500 up to age 49 and $31,000 for participants age 50 or older.

Not many people do that — only 14% of savers actually set that much aside last year, per Vanguard data. "I focus my clients on maxing out the contributions they make to their retirement plan," financial planner Zaneilia Harris said. "The match is the bonus."

Asian woman managing personal banking and finance. Paying bills online. Making financial plans.

Planning budget and calculating expenses with digital tablet while going through bills at home. Home finances. Home budgeting.

Banking and finance concept · d3sign via Getty Images Need a 401(k) loan? Not so fast. Employers are also putting the brakes on allowing workers to raid their retirement accounts.

The number of firms permitting 401(k) loans fell 8 percentage points this year, according to SHRM. That could pinch workers facing higher living costs. Vanguard found that 6% of participants took a hardship withdrawal in 2025, up from 5% in 2024 and the highest share on record.

Nearly half took more than one withdrawal. Story Continues Workers most commonly tapped their accounts to avoid foreclosure or eviction, cover medical expenses, or pay for home repairs. Read more: What is a healthcare FSA?

How to save on medical costs. On a brighter note: Leave benefits improved. "Paid family and parental leave offerings continued to expand, and more than half of employers now provide leadership and managerial coaching," Decker said.

"These investments reflect a broader commitment to supporting employee growth, well-being, and long-term organizational resilience." Other benefits gaining traction include elder care services, employer matches for 529 plans, and pet health insurance. Employers are also offering slightly improved education benefits.

The average maximum amount offered for tuition assistance or student loan repayment climbed to $5,546, up $174 from 2025. Those extras could matter as employers compete for talent. Nearly 70% of human resource professionals report challenges recruiting for full-time positions, according to an earlier SHRM report.

And half said recruiting is more difficult than it was a year ago. Nearly half of US workers plan to look for a new job in the next six months, a shift worth watching after years of "job hugging" in a low-hire labor market. The top reason for considering a move?

Better benefits and perks. Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist and the author of 14 books, including "Retirement Bites: A Gen X Guide to Securing Your Financial Future," "In Control at 50+: How to Succeed in the New World of Work," and "Never Too Old to Get Rich."

Follow her on Bluesky and X. You can reach her at kerry.hannon@yahooinc.

com Sign up for the Mind Your Money newsletter Click here for the latest personal finance news to help you with investing, paying off debt, buying a home, retirement, and more Read the latest financial and business news from Yahoo Finance Employers are acutely aware of the value of helping employees save for retirement, but their recent actions are