25 Changes to Your 401(K) Plan That Can Save Your Retirement

Increase Your Contributions

Can you contribute the maximum amount for your 401(k)? Not many people can! For example, back in 2020 as well as in 2021 the maximum amount was $19,500. An employee that takes home $50,000 can’t realistically set nearly $20,000 away. Also, those at the beginning of their careers face the same issues.

But a good strategy is to increase your contributions little by little. From a cash-flow perspective, these small increments won’t hold you back financially. But in terms of your 401(k), they’ll mean a lot, especially in the long run.

So, you should aim to increase your contributions by 1% every month, quarter, or year, depending on your finances, and always contribute more when you get bonuses or raises. If your salary sits at $50,000, then a 1% increase only amounts to $41.67 per month- not bad, huh?

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