401k




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How Much for Your 401k?
by WealthEffect Staff

 
 

Put in the maximum
 
  Employee limits  
  Employer limits  
 
1.

Your 401k is, simply put, a terrific investment. Your contributions are deductible, reducing the taxes you must pay each year. Further, the money you invest grows tax-deferred, giving you the advantages of compound growth. And there is also the peace of mind which comes from knowing that you are saving — and saving well — for your retirement.
 
 
2.

The maximum which you, as an employee, can contribute to your 401k is $10,500 per year. Add to that the $2,000 which you can put into your IRA annually, and you have a nice nest-egg to invest for your future needs.
 
 
3.

If your employer contributes to your 401k, as well, the maximum here is 15% of wages up to $24,000. You should take advantage of any "matching-contribution" programs at work in which your employer contributes a certain amount of money or stock for every dollar you put in your 401k — this is wonderful benefit which cannot be emphasized too strongly. (If you are considering a job offer, you should factor in the relative generosity of the company's 401k programs.)
 
 
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