401(k) Plans

Learn how to maximize your 401K retirement accounts with expert advice on contributions, investments, and planning for the future.

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401k Plans

A 401k is one of the most popular deposit accounts specially designed to save money for retirement. With a 401k, you can set aside a portion of your regular paycheck toward retirement savings, and your contributions aren’t taxable until it comes time to withdraw them.

One of the best ways to take advantage of a 401k is to enroll in an account with automatic payments so your contributions are set aside at regular intervals, which alleviates missed manual payments and transfers. Another perk is the availability of employer-sponsored 401ks: If your workplace offers matching contributions to your account, it’s like getting free money toward your retirement goal.

Learn more about 401ks here on GOBankingRates, where there are always new articles and tips on saving for retirement and making the most out of your finances.

FAQ

Here are the answers to some of the most frequently asked 401K questions.

How much money you should have in your 401(k) will depend on other investments you have such as property, stocks, bonds or other retirement savings. However, in general, financial experts recommend you base your 401(k) funds on your age and salary. For example, by age 30 you should have the equivalent of your salary, by age 40 you should have three times your salary, by age 50 you should have six times your salary and by retirement age of around 67 you should have 10 times your salary saved in your 401(k) for a comfortable retirement.

Learn More: How Much Money You Should Have in Your 401(k)

The amount you contribute to your 401(k) can depend on your current financial situation or the debts you owe. However, money advisors generally recommend that you invest around 10% to 15% of your annual salary into your retirement savings.

Learn More: How Much Should I Contribute to My 401(k)?

Maxing out your 401(k), especially if it has an employer match, is a good idea if you plan to live off that in retirement. This isn’t always the easiest to accomplish depending on factors such as your income, living expenses and debt repayments.

Learn More: Dave Ramsey: Should You Max Out Your 401(k)?