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How Much Can I Contribute To A 401K Plan?

Plan a financially comfortable retirement when deciding how much can I contribute to a 401K plan?

Many companies offer their employees the chance to participate in a 401K plan. These plans are excellent opportunities to make your money grow in a tax-deferred environment.

How Much Can I Contribute to a 401K Plan

For 2009, most employees can contribute up to $16,500 in pre-tax dollars to their 401K plan. If you are 50 or older (or are turning 50 in the calendar year) you can contribute an additional $5,500 in catch-up contributions.

How To Decide How Much to Contribute To A 401K Plan

When deciding how much you want to contribute to a 401K plan make sure you look at your budget and try to squeeze as much out of it into your retirement planning. Do you really need that daily latte at $5.00 a shot?
If you are in the habit of making daily purchases like this and you give it up, you will free up $1,300 a year in additional contributions to your 401K. Imagine how this money will multiply over years. Think of the type of retirement you want to enjoy and decide whether or not a few sacrifices right now are worth a worry-free future.

Take Advantage of Company Matching Plans

Some companies offer to match your contributions up to a certain point. When deciding how much to contribute to your 401K plan, calculate the maximum they will match and if possible, contribute at least that much. This is a benefit that not everyone has available to them. This is free money, not taking advantage of it does not make much financial sense.

Planning for a secure financial retirement is very important. Contributing to a 401K plan is an excellent way to help ensure that your retirement will be a happy and stress-free time in your life.

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How Much Can I Contribute To A 401K Plan?

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