3 Secrets to Maximize Your 401(k) for Millionaire Retirement
Introduction
The roadmap to success is simple to follow. For many, an employer retirement plan like a 401(k) is a powerful wealth-building tool that can turn retirement dreams into reality. Obtaining 401(k) millionaire status requires steady action over the years, but it's more doable than you might think.
1. Do More Than the Minimum
Familiarize yourself with the 401(k) contribution limits and plan accordingly. For 2024, you can elect to contribute as much as $30,500 and $76,500 in total each year, depending on your age.
- The problem for many people is that they elect to contribute the bare minimum or less than they can truly afford.
- Remember that your savings rate will significantly affect how much wealth you accumulate in your 401(k) over time.
2. Grab That Free Money
Everyone with access to an employer match should contribute at least enough to earn the full match if they can.
- This is a monetary incentive from the employer to encourage employees to participate in their plans.
3. Stay Out of the Way
Life can be challenging, but think long and hard before tapping into your 401(k) early. The long-term costs are likely far more significant than you realize.
Avoid early withdrawals to let your funds grow over time.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.