THIS fatal savings mistake could cost you thousands in retirement.
Fortunately there is still time to avoid costly errors.
While 401(k) While it’s a great way to save for retirement, it’s important that you know how to use it to its fullest potential.
If you qualify for a 401(k) match at work, your employer can help you save for retirement by putting some cash aside if you contribute to your 401(k).
However, this is a limited time offer and when the year is over, you can no longer claim it 401(k) Match.
So if you miss this offer and skip your 401(k) contribution, you’re essentially giving up a bonus that could be worth thousands of dollars.
The 401(k) matching formula varies from company to company, but a common arrangement is to do a dollar-to-dollar match on 3% of your earnings, or a $0.50 match to dollars over 6% of your earnings, as reported KOAM News.
Someone making $50,000 a year will contribute between $1,500 and $3,000 of their own money, while their employer will add another $1,500.
Most employees can now deposit $19,500 a year of their money into a 401k account, excluding employer contributions.
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However, workers over the age of 50 are eligible for an additional timely contribution of $6,500 in 2020 and 2021.
In 2022, the IRS will raise the contribution limit to $20,500 — a $1,000 increase.
You should ask your human resources department how you operate to find out your company’s approach.
Most companies have a test schedule that determines when you can actually make your 401(k) match.
Some companies require employees to work for them for a certain number of years before they are allowed to stay in a relationship with their employer.
Other companies release your 401(k) match gradually over time.
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https://www.the-sun.com/money/4726496/saving-mistake-could-cost-you-thousands-when-you-retire/ A Serious Savings Mistake That Could Cost You THOUSANDS OF THOUSANDS in Retirement