One of the 'rare guarantees' in investing is accessible to 401(k) savers, according to a CFP.

• A 401(k) match is often considered free money.
• Many employers provide a matching contribution for their employees' savings in a 401(k) plan.
• However, workers may need to remain at the company for a specific period before the match is entirely theirs.

There are few certainties when it comes to investing.

The stock market can appear to fluctuate unpredictably, with news cycles and investor sentiment driving its direction. While long-term stock returns have typically increased, daily, monthly, and annual returns are not guaranteed. The standard investment disclaimer states, "Past performance does not assure future results."

Financial advisors suggest that the 401(k) match is an outlier in the world of investing.

Employers often match workers' retirement savings up to a certain amount, which is commonly referred to as "free money" by advisors.

If a worker contributes 3% or more of their annual salary to a 401(k) plan, the employer may match their contribution with another 3%.

If the investor receives a dollar-for-dollar match up to 3%, they will double their money, resulting in a 100% profit.

Kamila Elliott, a certified financial planner and co-founder of Collective Wealth Partners in Atlanta, stated that a match is a rare guarantee on an investment.

Elliott, a member of CNBC's Advisor Council, stated that if you were in Vegas and every $1 you put into the slot machine resulted in a $2 payout, you would likely spend a considerable amount of time at that machine.

The money can have certain conditions attached to it, such as a minimum worker tenure, commonly referred to as a "vesting" schedule.

Most 401(k) plans have a match

A 2023 survey by the Plan Sponsor Council of America found that approximately 80% of 401(k) plans offer a matching contribution.

Employers can utilize various formulas to determine their workers' respective compensation.

According to the PSCA, the most common formula for matching contributions in a 401(k) plan is a 50-cent match for every dollar a worker contributes, up to 6%. This means that if a worker saves 6% of their pay, they will receive an additional 3% in the form of a company match, resulting in a total of 9% in their 401(k).

According to Vanguard, a 401(k) administrator and money manager, there is no other place where you can get a guaranteed return of more than 50% on an investment.

The "billion-dollar blind spot" of 401(k)-to-IRA rollovers may not prevent poor savings, but high earners can funnel money to a Roth IRA.

Two employees, each earning $65,000 annually and eligible for a dollar-for-dollar employer 401(k) match of up to 5% of pay, have different values of an employer match.

While the first worker contributes 2% to their 401(k) and qualifies for a partial match, the second worker saves 5% and receives the full match. Over 40 years, the former worker would have saved approximately $433,000, while the latter would have amassed a nest egg of about $1.1 million, assuming a 6% average annual investment return.

It is advised by financial advisors that individuals with 401(k) access should aim to save at least 15% of their annual salary, considering both personal and employer contributions.

Keeping the match isn't guaranteed, however

That so-called free money may come with some strings attached, however.

"Vesting" requirements may mean that workers must remain with a company for a certain period before they can fully claim their money.

According to the PSCA, approximately 60% of companies mandate a tenure period of between two and six years before employees can depart with their full match intact. If workers leave prior to this timeframe, they may lose some or all of their match.

The money is theirs right away, with no immediate vesting.