Maximizing Your Workplace 401(k) Plan
A 401(k) is one of the most powerful wealth-building tools available to employees, offering automated investing, tax advantages, and employer matching contributions.
The Power of the Employer Match
An employer match is essentially free compensation. If an employer matches 50% of contributions up to 6% of salary, contributing 6% yields an immediate, guaranteed 50% return on your invested dollars before market growth even occurs.
Compound 401(k) Growth
Combines your starting balance growth with the future value of recurring monthly contributions and employer matches over your career horizon.
401(k) Optimization Rules
- Capture the Full Match FirstNever contribute less than the exact threshold required to capture 100% of your company's matching dollars.
- Inspect Investment OptionsReview the internal expense ratios of funds in your 401(k) menu and prioritize low-cost broad-market index funds.
- Utilize Auto-EscalationEnable automatic 1% annual contribution increases aligned with annual merit raises to painlessly reach IRS contribution maximums.