You’ll often hear that Social Security won’t provide you with enough income to maintain a comfortable lifestyle in retirement, and that’s true. Those benefits will only replace about 40% of your pre-retirement income if you earn an average wage, and most seniors need about twice that much money to live the lives they want.
That’s where your personal savings come in. And if you have access to a 401(k) plan, you have a prime opportunity to sock away a decent sum of money for your senior self.
But if you mismanage your 401(k), you could end up sorely lacking in retirement income. And if you’re eager to avoid that fate, you’ll need to steer clear of the following blunders.
1. Not saving at a young age
It’s easy to let 401(k) contributions fall by the wayside at a time when you may be more focused on building near-term savings, paying off debt, and navigating young adulthood. But when it comes to growing long-term wealth, time is your most powerful tool. And by not funding a 401(k) when you’re young, you could end up missing out on years of growth in that account.
Behind on retirement savings? Over 50? Make catch-up contributions to your IRA, 401(k).
2. Not contributing enough to snag your full employer match
Many companies that sponsor 401(k)s also match worker contributions to varying degrees. If you don’t contribute enough to claim your company match in full, you’ll end up leaving free money on the table – and risk winding up short down the line. As such, find out what your…
