What you Should Know about your Retirement

Retirement is something that most working people look forward to, but it’s also something that many people worry over and feel that they’re not entirely prepared for. That said, there are a few things you should know about your retirement and how to ensure that you’re ready to make the most of your retirement! There are many ways to do this, but making the most of your 401k contributions and meeting certain milestones within your 401k are two simple, yet important things that will help you be as prepared as possible for your retirement.

Maxing Out your 401k

Maxing out your 401k each year can be difficult, and depending on your situation each year it may not always be possible to max out your 401k. The current contribution limit for your 401k is $18,500 in 2018, which in itself is vital information in maxing out your 401k. That said, you may wonder what the importance is of contributing the most possible money each year, and while it obviously means that you’re putting away more money towards retirement it also means that you’ll get the best possible tax deduction on the money that you put away.

Also, for those over the age of 50, you’re allowed to make what are called "make-up contributions” of an additional $6,000 for a total of $24,500 in 2018. This is a great way to put more money towards retirement if you’re feeling like you haven’t been putting enough money away or if you’ve been unable to previously max out your yearly contribution.

Lastly, while 401k matching programs differ from company to company, contributing more to your 401k each year obviously means that your employer will be matching a larger sum of money.

Meet some Major 401k Milestones

Acknowledging and meeting certain milestones in your 401k is an excellent way to ensure that you continue to push towards contributing the most money possible to your 401k. $1 million is a figure that may seem to be a large number at first, but it’s a major milestone that you should strive to meet to get the most out of your 401k. Many 401k millionaires have been saving for close to 30 years to meet such a figure, which is why understanding and planning for your retirement as early as possible is crucial.

In addition, hopping from job to job is something that a lot of people do and changing jobs is certainly not a bad thing. However, when going from one position to another—especially when moving from one company to another—be sure that you understand how your retirement funds could be impacted, as well as how your new company’s retirement programs operate.

In all, retirement can seem intimidating and can be something that you look forward to despite not knowing if you’re financially prepared. However, with proper preparation and understanding, you can ensure that your 401k is fully prepared to give you the best retirement possible. Contact Carolina Money Minders for more retirement help.