Building Good Money Habits

Maximize Contributions To Retirement

It’s time to get to know the deadlines, the contribution limits, and any free money you’re entitled to in any of your retirement accounts. A good example of this is the 401(k) employers provide. You should be maxing out your contribution to this account each paycheck and should start this from the beginning of your employment. Even if your employer doesn’t offer a match to your contribution, it’s money you’re not being taxed on. It’s also money that goes toward your future. If your employer does offer a contribution match, it’s even more important to max out your contributions.

For example, if your employer offers to contribute twenty percent of anything you put into your retirement account, it doesn’t make financial sense to miss out on free money by not opting to maximize contributions. If you are permitted to contribute one thousand dollars per month, you’re earning two hundred dollars per month in free money from your employer. If you only contribute one hundred to the account every month, you’re only earning twenty dollars in free money every month. Over the course of your life, you’re potentially earning tens of thousands of dollars or more in free money because you chose to contribute. Know your retirement account, their limits, and how to max them out each year for the biggest benefits.

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