Retired in America

Your Guide to a Confident Retirement

  • Home
  • Personal finance
  • Retirement Life
  • Saving & Spending

Here’s How Your 401(k) Plan Will Help You in Retirement

October 29, 2020 · Personal finance

Lots of people put off starting to save for retirement. We can’t blame them, even the first step is complicated. How do you know you’re picking the right account? Which investment vehicle should you choose? How will it all look decades down the line?

As with anything, taking that first step is the most important thing you can do!

If you’re still a little confused but you do have access to a 401(k) account, you should always opt for it. You’ll be one of the lucky ones as not all employers offer them, so take advantage while you can!

In order to help in your decision-making process, we’ve prepared a list of 5 ways your 401(k) will catapult you to your goals!

High contribution amounts

How much you save over the years will obviously have an impact on how much you spend during retirement. The higher the limit to what you can set aside, the better. Even if you can’t reach that ceiling right now, years down the line your income could be significantly bigger, so much so that an IRA’s limit of $6,000 a year would feel constraining.

Comparatively, 401(k) accounts allow you to set aside $19,500 each year, but you can add $6,500 more per year if you’re over the age of 50, known as catch-up contributions.

If you earn 8% a year on the $6,500 contributions to your IRA, in 20 years you’ll have amassed $297,000. In the same amount of time, 8% earnings on your 401(k) plan’s $19,500 contributions, you’ll have $964,000.

You could argue that contribution limits to IRAs have risen over the years, but it’s unrealistic to believe they’ll come anywhere near the limits for 401(k) plans.

Pages: 1 2 3 4 5

Share this article

Facebook Twitter Pinterest LinkedIn Email

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Search

Latest Posts

  • A senior woman looking thoughtfully at her phone in a bright, modern home office. 6 Social Security Scams You Need to Pay Attention to
  • A happy retired couple enjoying the sunset on a beautiful porch. 8 States to Retire For Less Than 45K a Year
  • A retired couple looking at a map on a sunny balcony overlooking a beautiful coastal town. 10 Countries to Retire Where $150K Is More Than Enough
  • A happy retiree working on a laptop on a sunny patio, symbolizing flexible part-time work. 20 Great Part-Time Jobs For Retirees
  • A senior couple smiling while looking at a tablet in a bright, modern kitchen. 5 Crucial Medicare Changes Coming Soon
  • A senior couple happily unpacking groceries in a bright, modern kitchen. 9 Ways to Shop at Costco Without a Membership
  • A happy retired couple stands on the porch of a beautiful, sunny home, symbolizing an affordable and joyful retirement. 10 Best Places to Retire That Won't Break the Bank
  • An older man confidently using a laptop in a sunlit home office, symbolizing digital security. 7 Common Passwords To Avoid
  • A retired couple looking out a window in their bright, downsized modern home. 11 Mistakes to Avoid When Downsizing Your Home
  • A retired couple smiling on a balcony overlooking a scenic coastal village at sunset. 12 Best Countries to Live Perfectly Well on Social Security

Newsletter

Get retirement planning tips, savings strategies, and lifestyle insights delivered to your inbox.

Related Articles

11 Out of the Box Methods to Save for Retirement

The coronavirus pandemic has created more than just a health crisis around the world. In…

Read More →

11 Things Retirees Should Buy ONLY at Costco (And Why)

The big-box retailer is the perfect place to find a good deal, especially for retirees.…

Read More →

8 Types of Retirement Income That Are Exempt From Taxes

You’ve always been a hard worker and a conscientious taxpayer, waiting for your retirement day…

Read More →

11 States With the Best/Worst Social Security Checks in 2022

Americans that are about to retire should expect to see a 5.9% increase in their…

Read More →

14 Tips To Make The Most Of Your Social Security Check

According to data collected by the AARP Public Policy Institute, around 24 percent of people…

Read More →

7 Tips for Healthier Financial Decisions

There are many good things that come with good financial help such as peace of…

Read More →

10 USA Cities With Rents Under $1000 for Seniors

Discover 10 vibrant, safe, and affordable US cities where seniors can easily find comfortable apartments…

Read More →

Should the Rich Fix Our Social Security?

During retirement, one source of income that a lot of seniors depend on is Social…

Read More →

The Worst 5 States for Seniors to Be Healthy

Discover the worst states for senior health, the systemic challenges retirees face in these regions,…

Read More →
Retired in America

Your Guide to a Confident Retirement

Inedit Agency S.R.L.
Bucharest, Romania

contact@retiredinamerica.com

Trust & Legal

  • About Us
  • Editorial Policy
  • Advertiser Disclosure
  • Frequently Asked Questions
  • Disclaimer
  • Terms and Conditions
  • Privacy Policy
  • Subscribe
  • Unsubscribe
  • Contact Us

Categories

  • Personal finance
  • Retirement Life
  • Saving & Spending

© 2026 Retired in America. All rights reserved.