This video will show you how to calculate your 401k contribution on your W2 form, to maximize your 2024 contributions. Planning ahead of the start year, will ensure that you are setup for the correct amount each paycheck and not have to worry about allocating too little or not taking full advantage of the new 2024 401k allowed amount.
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As the year comes to a close, many individuals are beginning to think about their financial goals for the upcoming year. One important aspect of financial planning that often gets overlooked is setting up or maximizing contributions to a 401k retirement account.
A 401k account is a tax-advantaged retirement savings plan that is offered by many employers. It allows employees to contribute a portion of their pre-tax earnings to an investment account, which can then grow over time until retirement. Contributions to a 401k are made through payroll deductions, making it an easy and convenient way to save for the future.
For the year 2024, the maximum contribution limit for a 401k account has been set at $20,500 for individuals under the age of 50. For those age 50 and older, the maximum contribution limit is $27,000, which includes an additional catch-up contribution of $6,500. By maximizing contributions to your 401k account, you can take advantage of the tax benefits and potentially grow your retirement savings at a faster rate.
Setting up or maximizing contributions to a 401k account is a simple process that can be done in just a few steps. First, you will need to contact your employer’s human resources or benefits department to inquire about the 401k plan options available to you. They can provide you with the necessary paperwork to enroll in the plan and set up your contributions.
Next, you will need to decide how much you want to contribute to your 401k account each paycheck. You can choose to contribute a percentage of your pre-tax earnings or a specific dollar amount. It is important to keep in mind the maximum contribution limits for the year when setting up your contributions to ensure you do not exceed the allowed amount.
Once you have set up your contributions, your employer will deduct the specified amount from your paycheck and deposit it into your 401k account. The contributions will then be invested according to the investment options available within the plan, such as mutual funds, stocks, or bonds.
By maximizing your contributions to a 401k account, you can take a significant step towards securing your financial future. Not only will you be saving for retirement, but you will also be taking advantage of the tax benefits that come with contributing to a 401k account.
As the new year approaches, consider taking the time to set up or maximize your contributions to a 401k account. By doing so, you can put yourself on the path towards a comfortable retirement and financial security. It only takes a few simple steps to make a big impact on your financial future – so why wait? Start the new year off right by maximizing your 401k contributions and setting yourself up for success.
How much are you contributing to your 401k every paycheck?
Great video. We spent the last 6 years in payoff our debt and mortgage mode and building up a cash savings while making 15% contributions to our 401K/403Bs. That goal has been achieved so as of my last paycheck we are contributing for me the $30K (max per year over age 50) in my 401K and $12K for Sue in her 403B so our total tax advantaged savings starting in January 2024 is going to be $42K/year. This makes me feel like such an adult! In addition, Sue has a ROTH, we have a brokerage account and while our cash savings is in decent condition there is always room for more. Going to do auto transfers to our brokerage account on the 15th and 30th and $500 into savings on the 8th of the month. Any dollars that survive the carnage will go into savings for home improvements for now. We are expecting to run a +/- 45% savings rate for the next few years. In the past we were not very mindful of where our money was going now that has all changed and it is so much fun watching our nest egg grow. Again I appreciate your videos!
It’s insane to max out your 401k. Your money is locked up until 59.5. People should fill up their 401k half-way and then build a brokerage account with the rest of the money.
If you want to retire in your early 50’s or change careers you can do this. Why be locked in a prison because the government says you have to wait until near 60?
Thanks for the 3rd grade math class?