Figuring out how much to put away in a 401K with variable matching

Retirement

My wife’s company’s 401K has a terrible matching/vesting policy, with the amount of contributions that they match going up by 25% every year, starting at 0. Because of this, when she started working there, we honestly didn’t put much in her 401K (6%, I think?) and decided to compensate the rest of it with Roth. However, now, they would be matching 75% of contributions. I know that the prevailing wisdom is “put in as much as they’ll match, then put the rest in your IRA until you’ve maxed that out” (the prime directive, etc), but in light of this, should we just be putting as much into the 401K for the “free money”? Should I up hers to 10% or even more, at the expense of Roth contributions?

We don’t own a home yet and saving towards that is our #1 financial goal, but we also are starting retirement saving early enough that I’m kind of trying to set us up to retire by 55, if possible.

Posted Feb 20, 2025, 11:36 AM UTC

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