401 K and saving for retirement

A 401k program is a great way to save for retirement.  Most companies offer some sort of program, although each will vary slightly.  A lot of companies also match the money you put in up to a certain percentage.

If your company offers an employee match program and you are not taking advantage of it, start now.  You are just denying yourself FREE money.  It’s like getting a raise for whatever percentage your company matches.  My husband company matches up to 3 %, so every year we get an extra 3% of income that goes straight to our retirement savings!

It seems like a no brainer, right?

Another big plus to a 401k is that the money is taken straight out of your salary and you are not taxed on it. So if you make 100,000 dollars a year, and your company matches 3 % so you put in just 3% which equals 3000 dollars.  So you just saved 3k and your company gives you 3k, so you saved 6k for the year and now you will only be taxed on 97,000 dollars.  It’s what I call a win win.

Another easy way to save for your retirement is to add one percent each year. So if you are contributing 5% now, next year try 6%.  These slow changes pay off big time down the line.  Every 1% adds up.  It is a lot easier to adjust your budget by 1% than by big amounts.

If you told me when I first got married to put 20 % of my income into my 401k, I would have said you were crazy and that I would never be able to do that.  But guess what this year starting in January 2018 we bumped our 401K up to 20%.  We have been adding a percentage a year, and it is feasible.  We are also seeing our retirement savings go up and up.  This is the first year we actually bumped it up by 2 %.

401k is an easier way to save in my opinion because you never see the money.  It’s hard to save the money I get every week.  I can always seem to come up with something we “need”. But having the money come out of my check before it ever gets to me is easy.  I don’t see it, so I don’t feel like I am missing anything.

Start small, build your way up, and you will be astonished at what you can accomplish.