Try to max out your 401(k) each year and take advantage of any match your employer offers. Contributions are tax-deductible the year you make them, which can leave you with more money to save or invest. Once you max out your 401(k), consider putting your leftover money into an IRA, HSA, annuity, or a taxable account.
Is it better to spread out 401k contributions?
While some additional match is better than none, you may gain more by distributing your contributions evenly. The point, however, may be moot if your employer's plan offers a relatively small match or none at all. If so, you could front-load your plan, and then look to other tax-advantaged savings options.
What are 2 benefits of contributing to a 401k?
Here are 5 benefits of most traditional 401(k) plans:
- Tax advantages. Contributions to a traditional 401(k) are taken directly out of your paycheck before federal income taxes are withheld. ...
- You are in control. ...
- Time is on your side. ...
- You can take it with you. ...
- Easy payroll deductions.
