Boost Your Contributions
There are many people with 401(k)s who don’t know or can’t provide maximum contributions to their plans. In order to succeed in increasing your contributions, you should know certain basic aspects.
For instance, in 2020, employees are allowed a maximum contribution of $19,500 to their 401(k) plan. As such, someone making $50,000 a year would not gain much from putting away $20,000 into a 401(k) plan. On the other hand, starting with a 5% contribution of your income to your 401(k) plan from the very beginning and then adding 1% every month, quarter or year would help you boost your contributions without noticing major effects on your cash flow. In the long term, you will be working for your 401(k) and, implicitly, your own financial wellbeing.
