According to the likes of Bob Jain, a 401k is perhaps the most worthwhile savings plan that you can implement. It helps you prepare for retirement so that you have ample money saved up when you no longer have to work. Retirement is one of the most common goals that people strive for, but you can get there quicker by getting the most out of your 401k as possible. To succeed in this endeavor, here are 4 pointers that should be remembered.
One of the ways to get the most out of your 401k plan is by increasing your savings with each pay raise received. This doesn't mean that the entirety of your raise has to be dedicated to the plan in question, but you can still contribute a few dollars more if you'd like. As a matter of fact, this is one of the best ways to reach the point of retirement earlier in life. Financial authorities such as Bob Jain would be hard-pressed to disagree.
Another way to get the most from your 401k is by consulting your employer to see if they can match your contribution. For example, if you invest about 5% of your biweekly pay into your retirement savings account, your employer may match it. What this means is that you get an additional bonus that you can use toward your 401k. Even if you're under the impression that your workplace won't allow this, it doesn't hurt to ask.
You should also resist dipping into the money in your 401k plan, as it can have many negative consequences. First, you will be penalized for taking money out, meaning that you'll have to make a payment on top of what you've withdrawn. Second, you will reduce progress made from a retirement saving standpoint. While it's understandable that someone may fall on hard financial times, taking money out of the 401k is an absolute last resort.
Finally, at the end of each year, take the time to review your 401k plan in relation to your long-term goals. See how much money you've saved over the last several months. Do you feel like there's room to invest more money? Do you feel like you have to pull back on the amount saved from week to week? These are just a few questions to bring up during the review process. The time spent on this will make a considerable difference for your 401k.
One of the ways to get the most out of your 401k plan is by increasing your savings with each pay raise received. This doesn't mean that the entirety of your raise has to be dedicated to the plan in question, but you can still contribute a few dollars more if you'd like. As a matter of fact, this is one of the best ways to reach the point of retirement earlier in life. Financial authorities such as Bob Jain would be hard-pressed to disagree.
Another way to get the most from your 401k is by consulting your employer to see if they can match your contribution. For example, if you invest about 5% of your biweekly pay into your retirement savings account, your employer may match it. What this means is that you get an additional bonus that you can use toward your 401k. Even if you're under the impression that your workplace won't allow this, it doesn't hurt to ask.
You should also resist dipping into the money in your 401k plan, as it can have many negative consequences. First, you will be penalized for taking money out, meaning that you'll have to make a payment on top of what you've withdrawn. Second, you will reduce progress made from a retirement saving standpoint. While it's understandable that someone may fall on hard financial times, taking money out of the 401k is an absolute last resort.
Finally, at the end of each year, take the time to review your 401k plan in relation to your long-term goals. See how much money you've saved over the last several months. Do you feel like there's room to invest more money? Do you feel like you have to pull back on the amount saved from week to week? These are just a few questions to bring up during the review process. The time spent on this will make a considerable difference for your 401k.
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