6 Ways to Fatten Your 401(k)/ August 30th, 2020
Did you start your retirement savings a little late in the game? Are you worried you won’t have enough saved by the time you say goodbye to your employer? Then read on. Here are 6 ways to beef up your 401(k) or 403(b).
- Make retirement savings a priority and if you haven’t set up a 401(k), 403(b), or any other retirement plan yet, start one now. Have the contributions automatically taken from your paycheck.
- Each year, increase the amount you put into your 401(k). See if your budget can handle a 1% increase in retirement savings each year. If your plan has an automatic increase option, use it so you don’t even have to think about it.
- Take full advantage of your employer’s match funds. Some companies offer an employer match program. If you contribute a certain percentage of your pay to your 401(k), generally 3-6%, your employer will also contribute $.50 to $1.00 for every dollar you contribute to your 401(k). That’s like free money, so make sure you’re contributing enough to get the full employer match.
- Save windfalls. If you get a bonus at work or an unexpected amount of cash, put that money into your 401(k) instead of spending it.
- Make catch-up contributions. If you’re 50 years or older, you’re allowed to defer an extra $6,000 per year to your 401(k).
- If you’ve been living beyond your means, stop. Get credit card debt under control. Letting debt get out of hand only make saving for retirement harder.