How To Maximize Your 401k Contributions In 2022By BenOni | November 15, 2022
If you want to make the most of your 401k contributions in 2022, there are a few things you can do to maximize your savings. Here are a few tips:
Know the contribution limits
The IRS imposes contribution limits on 401k plans. For 2022, the limit is $19,500 for employees under the age of 50. If you’re over the age of 50, you can contribute an additional $6,500, for a total contribution limit of $26,000.
Invest early and often
The sooner you start contributing to your 401k, the better. That’s because your money will have more time to grow through compound interest. In addition, make sure to contribute regularly. Even if you can only afford to contribute a small amount each month, it will add up over time.
Consider a Roth 401k
With a Roth 401k, your contributions are made with after-tax dollars. That means you won’t get a tax break upfront, but your withdrawals in retirement will be tax-free. This can be a good option if you think you’ll be in a higher tax bracket in retirement than you are now.
Invest in a mix of assets
When it comes to investing, diversification is key. That means you shouldn’t put all of your eggs in one basket. Instead, invest in a mix of assets, such as stocks, bonds, and cash. This will help to minimize your risk and maximize your returns.
Review your investments periodically
Your investment mix should be reviewed periodically to ensure that it still aligns with your goals. As you get older, you may want to rebalance your portfolio to include more conservative investments.
Following these tips can help you make the most of your 401k contributions in 2022. If you have any questions, be sure to speak with a financial advisor.