The 401(k) match has long been one of the most powerful tools for building retirement savings. It’s the “free money” we’ve all been trained to chase—and advise our clients to chase. So when Fidelity, Schwab, and others start finding new, creative ways to repurpose that match money—like paying down student loan debt or even contributing to HSAs—it raises an important question:
Are we helping, or are we just rearranging deck chairs on the Titanic?
Let’s start with the good. SECURE 2.0 opened the floodgates for some real innovation. Allowing employers to treat student loan repayments like 401(k) deferrals, and now, in a recent private letter ruling, even potentially using those same employer match dollars for HSAs—these are genuinely interesting, forward-thinking concepts. They recognize the financial reality of today’s workers: Gen Z and Millennials are drowning in debt and struggling with healthcare costs. Telling a 28-year-old with $110,000 in student loans and a $3,000 deductible to “save for retirement” feels tone-deaf. These ideas meet people where they are.
But here’s where the lawyer in me—and the long-term fiduciary thinker—starts raising red flags.
We’re still pulling from the same pot of money. The 401(k) match was never designed to be a catch-all financial wellness fund. It was supposed to build retirement security. Full stop. If we start siphoning those dollars toward today’s problems, what happens tomorrow? Yes, we reduce current stress, but do we increase future financial vulnerability?
It’s a bit like giving someone an umbrella in a thunderstorm, while quietly poking holes in their roof for when the next storm rolls in.
There’s also a bigger concern here—one that gets lost in all the cheerleading about “flexibility” and “innovation.” What if employers start using these programs not as a supplement, but as a substitute? “Oh, we don’t offer a 401(k) match andstudent loan help. We offer one pot of money, and you choose where it goes.” Sounds equitable. Feels empowering. But it’s really just a cost-saving rebrand. And once the marketing gloss fades, the math doesn’t lie: less going into retirement accounts means less available when people need it most.
Am I being cynical? Maybe. But I’ve been in this business too long not to recognize when a good idea starts becoming a Trojan horse.
So, what’s the answer?
Yes, give employees student loan help. Yes, fund their HSAs. But don’t do it instead of helping them save for retirement. Do it in addition to. Expand the benefit, don’t just reallocate it.
Because the only thing worse than not helping people today… is leaving them stranded tomorrow.
