Should You Contribute to a 401k With No Match?

Kelley C. Long
6 min readMar 15, 2021


A client recently asked me how to think about whether or not to contribute to a 401k plan that doesn’t offer a match, and while there are always nuances to decisions like this, there are some general things to consider for anyone in a similar situation. The decision comes down to a few factors:

  • Do you want to save more than the annual IRA contribution limits ($6,000 in 2021 unless you’re age 50 or older, then it’s $7,000)?
  • Is reducing your taxable income an important factor?
  • Will you save for the future otherwise?

Let’s break each of these factors down.

Do you want to save more than the IRA limits?

As a general rule, IRAs offer more flexibility than 401k plans, so if you’re not able or willing to save more than the annual limit there, it typically makes sense to prioritize IRA savings, particularly if you’re looking at a Roth IRA. (if you make too much to contribute to a Roth IRA, here’s how to do a backdoor contribution and get around the income limits)

If you’d like to save more than that, it might still make sense to put the annual IRA limit in an IRA due to the inherent flexibility of IRAs versus 401ks (for example, IRAs can be tapped for first-time home purchase and education expenses without penalty, with Roth IRAs adding the extra benefit of your contributions being available for withdrawal at any time without tax or penalty), then contributing to your 401k beyond that.

The Health Savings Account exception

If you’re eligible to contribute to an HSA, then I’d actually suggest prioritizing putting the maximum in that account before contributing to your 401k or IRA. I get into that more in this post.



Kelley C. Long

CFP & CPA writing about money & how it fits into life based on my work with everyday people as a financial coach.