Failing to Change Your Contributions Over Time
You’ve just found a new job and set your contributions to your 401(k). Did you know you can and should change them over time? According to the Financial Industry Regulatory Agency, you should save around 15% of your salary. Though it sounds unattainable, especially at first, at the very least you can consider this a goal.
Ideally, you would increase your contributions by 1% every year. That way, even if you start with just 3%, as time goes by you won’t feel a major financial burden. When it comes to raises, you could also increase the dollar amount of your contributions by half of the amount of your raise.
Keep in mind that 401(k) contributions limit change over time, so it’s important to keep up. In 2018, for example, the limit went up from $18,000 to $18,500.