Here are some tips from Chris Costello, CEO and co-founder blooom, one of the nation’s fastest-growing robo-advisors, designed specifically to maximize 401(k)s.
- Start contributing to your 401(k)
- One of the best money moves you can make is to make sure that as soon as you are eligible to participate in your 401(k) or 403(b) plan at work, you are contributing the full amount that your employer will match. It may not seem like a big deal now but down the road it is life-changing.
- Build your safety net
- Another great habit is to pay yourself first. For example, one easy way to do this is to take 10% of every paycheck and put it in savings, no questions asked.
- Automate your finances as much as possible
- Automating your finances is not only smart but a major time saver. Streamlining your money flow and expenses will help you budget save big.
- Get rid of debt
- Already have a relatively robust emergency fund? Awesome. Then go after the parasite of the financial world – bad debts.
- Get more than $500 on your tax refund? Look at your W-4
- A W-4 is a form you receive from HR once you’re hired. If you’re unfamiliar with what or how to enter the proper amount there are many online calculators available. Use them. Get your number and then call your HR department to compare what they have on file. If it’s different, change the allowances you’re claiming. If you’re fortunate enough to increase the amount you’re earning consider putting that into your 401k. You won’t notice a difference in your paycheck but you’re making a huge impact on your future.
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