- Elective Deferral (traditional limits) – $16,500
- Catch-up Contribution for Investors 50 yrs and Older – $5,500
The reality is, your contributions to your 401k/403b is the #1 reason for your success as an investor. Here are some strategies for increasing your contributions:
- Small Stretch Goal – If you are currently contributing just enough to receive the company match, increase your contribution 2%-3%. It’s a small but important impact, and shouldn’t create too much of a ‘paycheck shock.’
- Auto-Increase – Many retirement plans now allow you to select a date every year in which your contribution to your 401k/403b will increase by 1%/2%/3%. An annual increase of only 1% can have a dramatic difference on your nest egg.
- It’s a great idea to automate this, as it is easy for us to forget to increase our savings steadily, year by year. Additionally, this 1% increase avoids the aforementioned ‘paycheck shock’ of a large increase.