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Maximize Your Savings: New 401(k) Contribution Limits Explained!
Manage episode 485981707 series 2911349
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Episode Show Notes:
- The federal government has increased the maximum contribution limits for 401(k) plans starting next year.
- The employee contribution limit jumps by $2,000, rising to $22,500 — about a 10% increase.
- This adjustment is mainly due to inflation and the rising cost of living.
- Putting more money into your retirement plan now makes sense given these changes.
- Should you max out your 401(k)?
- It’s a tax-advantaged plan, effectively like getting free money from the government.
- The more you contribute, the better positioned you’ll be for retirement.
- Plan when you want to start withdrawing and how much you’ll need.
- If your employer offers a matching contribution, maxing out your 401(k) is a no-brainer — it’s free money toward your retirement!
- Knowing about the increased limits helps you adjust your paycheck deductions to maximize contributions.
- Contributing close to the new limit means investing roughly a couple thousand dollars a month or around $500 a week—great for building your retirement nest egg.
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