Saving for retirement feels easier when an employer helps the effort. Amazon offers a competitive 401(k) match that adds extra money to employees’ contributions, giving them a valuable boost toward long-term savings. Amazon matches 50% of employee contributions up to 4% of eligible pay, which equals a 2% maximum company match.
This means that by contributing at least 4% of their pay, employees can unlock the full match and put more of Amazon’s money to work for their future. The plan includes both traditional pre-tax and Roth options, making it flexible for different financial goals.
Amazon’s 401(k) plan also provides a three-year vesting schedule and allows a wide range of investment choices through its plan provider. Together, these features make it a strong foundation for building retirement savings.
Key Takeaways
- Amazon matches 50% of employee 401(k) contributions up to 4% of pay.
- Employees gain access to both traditional and Roth contribution options.
- Full vesting occurs after three years of service with flexible investment choices.
Overview of Amazon 401(k) Match
Amazon’s 401(k) plan helps employees build long-term retirement savings with a consistent employer match. It offers flexible contribution options, a simple enrollment process, and a clear vesting schedule that rewards continued employment.
How Amazon 401(k) Match Works
Under the Amazon 401(k) plan, employees can contribute from 1% to 90% of their eligible pay. Amazon matches 50% of employee contributions up to 4% of eligible earnings. This means employees who contribute at least 4% receive the full 2% employer match.
The company match is added to the employee’s 401(k) account and invested according to their selected investment options through Fidelity, Amazon’s plan administrator. This matching policy ensures that those who regularly contribute can grow their retirement savings faster.
Employees may contribute on a pre-tax, Roth, or after-tax basis, up to the annual IRS limit. In 2025, the standard contribution limit is $23,000, with an additional $7,500 catch-up limit for those age 50 or older. Catch-up contributions are not eligible for matching.
| Contribution Type | Employee Responsibility | Amazon Match |
|---|---|---|
| 1% to 4% of pay | Contribute to qualify | 50% match (up to 2%) |
| Over 4% of pay | Optional, no additional match | None |
| Catch-up (age 50+) | Allowed, not matched | None |
Eligibility and Enrollment Requirements
All Amazon employees age 18 and older are eligible to join the plan immediately upon hire. Enrollment is available through Fidelity, though it may take up to 10 business days after the start date to access the system.
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Both full-time and part-time employees can participate, and there are no service-time requirements for beginning contributions. Once enrolled, participants choose how much to contribute and how their funds are invested.
Amazon encourages early participation since matching contributions start as soon as employees contribute. Payroll deductions make saving automatic and consistent, helping employees take advantage of the company’s matching benefit right away.
Vesting Schedule and Timeline
Employer contributions under Amazon’s 401(k) match are subject to a three-year vesting schedule. Employees become fully vested after completing three years of service, defined as working at least 1,000 hours per calendar year.
If an employee leaves before vesting, they keep their personal contributions and any earnings, but unvested employer contributions are forfeited.
This structure encourages long-term employment while still allowing flexibility for career changes. After three years of continuous service, employees own 100% of both their contributions and the company match, providing a meaningful retirement benefit that grows over time.
Amazon 401(k) Contributions Explained
Amazon employees can build retirement savings through several contribution options. The plan allows pre-tax and Roth contributions, and those age 50 or older may qualify for catch-up contributions to increase their savings.
Employee Contribution Limits
Each year, the Internal Revenue Service (IRS) sets limits on how much employees can contribute to a 401(k). For 2025, employees under age 50 can contribute up to $23,000 of their pay. Amazon follows these federal limits, allowing participants to decide how much of their eligible earnings to defer.
Amazon employees can also take advantage of after-tax contribution options beyond regular pretax and Roth contributions. These after-tax contributions may be used for a “Mega Backdoor Roth” conversion, which lets employees convert after-tax funds into a Roth account within IRS limits.
The total annual limit for all contributions—employee, employer, and after-tax—is capped at $69,000 for 2025 (or $76,500 if eligible for catch-up contributions). Employees can adjust their contribution rate at any time through the plan administrator’s portal.
Roth and Pre-Tax Options
Amazon offers both Traditional (pre-tax) and Roth (after-tax) contribution options. With pre-tax contributions, money goes into the account before taxes, lowering taxable income for the year. Taxes are paid later when funds are withdrawn in retirement.
Roth 401(k) contributions work differently. Employees pay taxes on contributions upfront, but qualified withdrawals—both contributions and earnings—are tax-free in retirement. This structure benefits employees who expect their tax rate to be higher in the future.
Those unsure of future tax situations can split contributions between both types. This mixed approach allows flexibility and potential tax diversification at retirement. Participants can make changes anytime through their account settings with Fidelity, Amazon’s 401(k) plan provider.
Catch-Up Contributions for Eligible Participants
Employees aged 50 or older are allowed to make extra contributions called catch-up contributions. For 2025, the IRS limit for this group is an additional $7,500 beyond the standard limit.
This feature helps employees nearing retirement grow their 401(k) balance faster. The additional amount applies to both pre-tax and Roth contributions, allowing flexibility in tax planning.
Amazon supports these contributions automatically once a participant turns 50, as long as their contributions would otherwise hit the yearly maximum. Catch-up contributions must still follow IRS rules but can make a meaningful impact over the final working years before retirement.
Investment Options in the Amazon 401(k) Plan
Amazon’s 401(k) plan, managed by Fidelity, offers a broad set of funds that suit different levels of experience, risk tolerance, and retirement goals. Employees can choose from several core types of investments that balance growth potential and risk while keeping costs transparent and oversight easy.
Index Fund Choices
Index funds form the foundation of many long-term retirement portfolios because they track market benchmarks at low cost. Through Fidelity NetBenefits, Amazon employees can access broad stock and bond index funds that mirror major indices such as the S&P 500 or total U.S. market.
These funds help participants diversify across hundreds of companies with one simple investment. Because index funds are passively managed, expense ratios usually stay well below those of active strategies. This means more of each contribution remains invested and fewer fees eat into growth over time.
They also reduce the need for frequent decision-making. Employees who prefer steady, predictable exposure to the market may use index funds as their primary holdings. Combining different index categories—stock, bond, and international—can create a low-cost mix that aligns with an employee’s target asset allocation.
Target Date Funds
Target date funds automatically adjust their mix of stocks and bonds based on a person’s expected retirement year. Amazon’s 401(k) lineup includes several such funds, typically named by year (for example, Fidelity Freedom 2055 Fund). Each fund grows more conservative as retirement nears.
In early career years, a target date fund holds mostly equities for higher growth. As the target year approaches, its allocation gradually includes more bonds and cash equivalents to limit volatility. This design simplifies portfolio management and reduces the need for manual rebalancing.
Target date funds work well for employees who want an all-in-one option and prefer not to monitor daily market shifts. They also align easily with automatic enrollment, allowing participants to start investing quickly while maintaining a long-term strategy that adapts over time.
Actively Managed Funds
Actively managed funds use professional managers who pick specific securities in an effort to outperform a market index. Amazon’s plan includes these options for both stock and bond categories. They appeal to employees seeking potentially higher returns and willing to accept more variability in results.
Because active management requires research and trading, management fees and expense ratios are generally higher than those of index funds. Performance can vary widely depending on the manager’s approach and market conditions.
Many employees use actively managed funds to complement their portfolio rather than replace passive holdings. For example, combining an active growth fund with a core index fund may balance potential long-term gains with steady market exposure. The key is to review fund performance, risk ratings, and cost data provided in Fidelity NetBenefits before making selections.
Maximizing the Amazon 401(k) Match
Employees can grow their retirement savings faster by contributing enough to receive the full Amazon match. Understanding how employer contributions work and the rules for vesting helps workers avoid missing out on valuable company funds. Careful planning ensures each paycheck makes the most of this benefit.
Strategies to Receive the Full Match
To receive Amazon’s maximum employer match, employees should contribute at least 4% of their base salary to their 401(k). Amazon matches 50% of what workers contribute, up to that limit. This means the company contributes 2% of base pay when the employee contributes 4%.
Employees can set their contribution rate through Fidelity NetBenefits and adjust it anytime. Increasing contributions slightly with each raise helps maintain the full match without reducing take-home pay.
Regularly reviewing pay statements ensures contributions are correctly deducted and matched. For example:
| Contribution | Amazon Match | Total Added to 401(k) |
|---|---|---|
| 2% of salary | 1% match | 3% total savings |
| 4% of salary | 2% match | 6% total savings |
Employees who stay at Amazon for at least three years become fully vested, meaning they keep all employer contributions. Leaving earlier forfeits any unvested match.
Common Mistakes to Avoid
Some employees lose part of their match by not contributing enough or misunderstanding the vesting schedule. Anyone contributing less than 4% leaves free money behind since Amazon only matches up to that level.
Failing to update 401(k) contributions after job changes, raises, or bonuses can also reduce the match received. Those who start midyear should confirm they reach the 4% threshold across the remaining pay periods.
Workers who leave before completing three full years of service lose all vested employer contributions. Tracking start date and service hours helps prevent that loss. Finally, forgetting to review contribution limits and prior 401(k) activity from another employer may cause overcontributions and IRS corrections later.
Beyond the Match: Additional Features
Amazon’s 401(k) plan gives employees tools to grow retirement savings beyond the basic employer match. It offers tax-efficient options for higher contributions and flexible rules for managing funds when changing jobs or reaching retirement age.
Mega Backdoor Roth Strategies
Amazon allows employees to use after-tax contributions and convert them into a Roth 401(k) or Roth IRA, a feature known as the mega backdoor Roth. This strategy lets high earners save beyond standard IRS limits. For 2025, employees can contribute up to $23,500 to pre-tax or Roth accounts, but the total limit—including employer match and after-tax funds—can reach $70,000 (or $77,500 for those aged 50 and older).
To use this option, employees first maximize regular contributions, then direct extra money into the after-tax portion of the 401(k) plan. They can then choose an automatic conversion into Roth savings through Fidelity’s platform. This allows for tax-free withdrawals later in retirement and greater flexibility in long-term planning.
Those using this feature should confirm how after-tax funds are invested and keep records for tax reporting. It’s a useful option for employees who have already met standard contribution limits but want to continue building tax-advantaged retirement savings.
Rollover and Withdrawal Rules
When employees leave Amazon, they have several ways to manage their 401(k) plan balance. They can keep funds with Amazon, roll them into a new employer’s 401(k), transfer to an IRA, or cash out. Keeping or rolling funds preserves tax-deferred growth, while cashing out early triggers income tax and possibly a 10% penalty if under age 59½.
Withdrawals become penalty-free at age 59½, but the IRS allows certain exceptions, such as the Rule of 55, which permits penalty-free distributions if someone separates from the company after turning 55.
The plan also offers hardship withdrawals and 401(k) loans, though these can reduce long-term earnings. Understanding these options helps employees maintain control of their retirement funds and minimize tax impacts during transitions.
Frequently Asked Questions
Amazon’s 401(k) program includes a competitive matching structure, a clear vesting schedule, and options for both pre-tax and Roth contributions. Employees can enhance their long-term savings by understanding how matching percentages, eligibility requirements, and contribution limits interact with IRS rules.
What is the maximum percentage Amazon will match on my 401k contributions?
Amazon matches 50% of employee contributions up to 4% of base pay, which equals a maximum match of 2%. For example, if an employee contributes 4% of their salary, Amazon adds 2%. This match applies to both pre-tax and Roth contributions, but not after-tax amounts.
How does Amazon’s 401k vesting schedule work?
Amazon uses a three-year cliff vesting schedule. Employees must complete three full years of service before the company’s matching contributions become fully vested. Leaving the company before reaching this mark results in forfeiture of any unmatched funds.
What steps can I take to fully maximize my 401k benefits at Amazon?
Employees can maximize their benefits by contributing at least 4% of their base salary to receive the full match. Increasing contributions up to the annual IRS limit ($23,500 in 2025) can further grow savings. Those aged 50 or older can make catch-up contributions to boost their retirement balance.
Another strategy includes using after-tax contributions combined with a “mega backdoor Roth” conversion, when eligible, to gain more tax-advantaged growth. Selecting investment options that align with personal retirement goals also helps optimize returns.
Why might some employees find the Amazon 401k match percentage lower than expected?
The employer match is based only on base salary, not bonuses or stock awards, which can make the total percentage seem smaller. Employees contributing less than 4% of pay will also receive a proportionally smaller match. Understanding these limits helps avoid confusion about the payout amount.
Is there a waiting period before I am eligible for Amazon’s 401k match?
Eligibility begins immediately upon hire for employees aged 18 or older, but automatic enrollment typically occurs after 90 days unless the employee opts in earlier. Matching starts once contributions begin, so enrolling promptly ensures no missed match opportunities.
Have there been any recent changes to the Amazon 401k match program?
In 2025, plan adjustments reflected updated IRS contribution limits and expanded catch-up provisions for employees aged 60 to 63. The employer match rate itself—50% of contributions up to 4% of pay—remains the same. Amazon continues to partner with Fidelity to manage employee accounts and facilitate in-plan Roth conversions.