401(k) plans, whether company-sponsored or not, can be great vehicles for retirement saving. Maximize this account with a few simple steps.
- Get Growing – Many people can’t start contributing the maximum amount right away. To get to the maximum contribution, individuals should up their contributions by one percent each year. This is an amount that can be scheduled into the budget, but doesn’t break the bank.
- Maximize Bonus Checks – Instead of using that annual bonus to buy something fun, live off of it for the month. That way investors can use their regular paychecks to max out their 401(k) accounts. It isn’t as glamorous, but will help out in the future.
- Remember the 401(k) – When moving over to a new job, investors should make sure they take their 401(k) with them. After years of contributing, it would be a waste to leave that money sit.
- Plan for Emergencies – Always make sure to have a separate emergency fund. Those who don’t set one up ultimately have to take money out of their retirement funds for emergency situations, cheating themselves out of money later.
- Minimize Withdrawals – After retiring, investors should be careful not to withdraw a high percentage of their 40(k) a year. That money needs to last quite a few years. However, if investors have other investments such as real estate that bring in an income, they could withdraw more per year.
Being aware of how much money they are putting in and trying to make it last can help investors maximize their 401(k) account. Consider transferring to or opening a self-directed 401(k) with Mountain West IRA.