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Your email address will not be published.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

  • What $3,000 a Month Really Looks Like in Retirement Based on Where You Live What $3,000 a Month Really Looks Like in Retirement Based on Where You Live
  • An older couple in casual clothes sitting at a wooden kitchen table, looking at a tablet together in warm natural light. Here's What the Average Social Security Check Is in August (How Do You Compare?)
  • A retired couple walks down a peaceful, tree-lined suburban sidewalk during the warm golden hour. 10 Best Retirement Cities With Peaceful Neighborhoods
  • 10 Small Towns Where Retirees Can Live Like Millionaires 10 Small Towns Where Retirees Can Live Like Millionaires
  • An older veteran looking skeptically at a tablet showing a $10,000 XRP claim, watercolor illustration. American Veterans Are About to Receive $10,000 in XRP From Ripple - More Here!
  • A retired couple standing on a sunny balcony in Europe overlooking a coastal town at sunset. 10 Things to Know About Retiring Abroad
  • A thoughtful 68-year-old man sitting on his porch during golden hour, holding a warm mug. Here's the Average Social Security Benefit of 68-Year-Old Americans (How Do You Compare?)
  • A stylized gouache illustration of a couple walking along a path divided into Taxable, Tax-Deferred, and Tax-Free segments. In What Order Should You Tap Your Retirement Funds? (Find Out Here!)
  • An active retired couple laughing together on a wooden lakeside porch in New Hampshire during a warm autumn morning. The 10 States Where Retirees Receive the Highest Median Social Security Benefit Checks
  • A retired couple hiking hand-in-hand along a scenic desert trail lined with cacti during a warm, golden sunset. 20 Affordable Desert Towns Retirees Are Falling in Love With

Newsletter

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

Related Articles

6 Differing Retirement Goals You Need to Balance Out ASAP

On paper, saving for retirement isn’t all that complicated, right? You simply start budgeting to…

Read More →

10 Best Jobs for Retirees

A show of hands, please! Who here thought retirement was going to be relaxing, fun…

Read More →
A retired couple smiling while looking at a tablet in a sunlit room.

8 Factors That Affect Your Social Security Check

Discover the eight essential factors that determine your Social Security benefit amount, including your earnings…

Read More →
A mature couple at their dining table calmly reviewing financial charts on a tablet, illuminated by warm afternoon window light.

What Retirees Should Know Before Claiming Benefits

Learn essential strategies to maximize your retirement income by mastering the critical rules surrounding benefit…

Read More →

12 Best States to Retire in 2021

It’s true that retirement comes with many changes but it also brings numerous perks to…

Read More →

5 Major Financial Decisions Most Retirees Wish They Could Change

After years and years of financial decisions, twisting and turning, you’re finally leaving the workforce…

Read More →
An older woman smiling and laughing while talking on her phone at a sunlit kitchen table with a mug of tea.

Telephone Reassurance Programs: Getting Paid to Chat With Seniors

Discover how telephone reassurance programs offer flexible remote jobs by paying you to chat, verify…

Read More →

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

If your place of employment doesn’t offer pension plans, then saving up for your retirement…

Read More →

10 Effortless Ways to Make Extra Money for Retirement

Who doesn’t want to make money without putting much effort into it? After a lifetime…

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

Contact Us

Disclaimer

Terms and Conditions

Privacy Policy

Subscribe

Unsubscribe

Categories

  • Personal finance
  • Retirement Life
  • Saving & Spending

© 2026 Retired in America. All rights reserved.