- What is it? A retirement savings plan that offers free money from your employer and your investment grow tax free. You don’t pay income tax on the money you add.
- Do I need it? Yes.
- How much should I save? Annual maximum contribution limit is $19,500. Most employers will match 3%-6% of your salary.
- Watch out for! If your employer matches in company stock, you should trade it in for a target date retirement fund.
- Did you know?
- 4%-8% | average interest earned on 401K savings
- $38,107 | amount you earn on $10,000 @ 6% interest over 20 years with an employer 50% match
- $0.50 | The most common employer match is 50 cents on the dollar up to 6% of the employee’s pay. amount you earn on $10,000 @ 6% interest over 20 years with an employer 50% match
- Why? Because we don’t want to work forever.
- More info: Retirement Basics: What Is A 401(k) Plan?
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