澳门六合彩开奖app

Is It Time to Increase Your 401(k) and IRA Contributions?

Mar 18, 2024 1 min read

When it comes to saving for retirement, there鈥檚 no one-size-fits-all approach. Generally, the more you save, the better. Many experts agree that is a healthy amount to contribute toward your retirement fund, but setting aside that much can feel overwhelming when you鈥檙e also trying to pay bills, create an emergency fund and save for kids鈥 college. 

Should I Increase My 401(k) Contribution?

The short answer is: It depends. Personal savings goals can vary widely depending on when you plan to retire, if your work provides a pension, whether you have chronic medical conditions and what you would like your lifestyle to look like in retirement. Here鈥檚 what to consider when deciding if it鈥檚 time to start saving more.

Employer Match

If the company you work for offers a 401(k) matching contribution and you鈥檙e putting in anything under this amount, then you鈥檙e essentially leaving free money on the table. If your plan offers a match, be sure to increase your 401(k) contribution to at least enough to get all of it. You can always ramp up or scale back your contribution later. 

Just be sure to check your plan documents or speak with your financial advisor to see how often you can change your 401(k) contribution, as it varies from plan to plan.

Annual Limits

The for employee contributions, and $69,000 for the combined employee and employer contributions. If you're age 50 or older, you're eligible for an additional $7,500 in catch-up contributions, raising your employee contribution limit to $30,500. The Roth IRA max annual contribution limit for 2024 is $7,000 for people under 50 and $8,000 for those 50 and older. 

If you鈥檙e on track to max these both out, you鈥檒l want to look into other savings vehicles instead of increasing contributions.

Age and Investment History

If you began saving in your 20s, then 10% is generally adequate to fund a healthy retirement. But if you started saving later in life, you鈥檒l likely need to increase the amount you contribute. Experts recommend aiming to have 10 times your annual salary saved by the time you鈥檙e 67. 

Current Financial Picture

If you are carrying any high-interest debt or you don鈥檛 have an emergency fund in place yet, you may want to hold off on increasing your retirement fund contributions. Focus first on paying off your debt as quickly as possible and building your emergency savings account before putting more money into your 401(k) or IRA. 

Are You on Track for Retirement?

Our financial advisors can help you make a personalized plan and find the solutions that fit your needs. Contact a local Farm Bureau financial advisor to get started.

*Neither the Company nor its agents give tax, accounting or legal advice. Consult your professional advisor in these areas.

Want to learn more?

Contact a local FBFS agent or advisor for answers personalized to you.