5 Ways of Maxing Out Your 401(k)
- Begin early. Sign up to contribute to your company’s 401(k) the first day at work. Even if you can’t contribute a lot at first, make a contribution and allow the power of compounding work for you over the years. All things being equal, the length of time you allow your earnings to grow has the biggest impact on how much you’ll have at retirement.
Max out your contribution. Force yourself to save and you’ll find that it’s easier than you think to live within your means.
Always max out the company match. Many companies match employee contributions up to a certain percentage. Be sure to take advantage of the company match up to its limit. It supercharges your savings.
Don’t take distributions or loans from your 401(k) until you are retired. Distributions not only reduce the amount you have at retirement but can cause painful tax penalties.
Create a well diversified portfolio from the choices available to you. This is one of the biggest problems employees have: not knowing how to invest the funds they are saving. Now there is help available from Registered investment Advisors like Korving & Company that specialize in helping people manage their retirement plans, turning your 401(k) into a 401(OK).