1 No-Brainer Retirement Savings Move That You'll Thank Yourself for Later

Source The Motley Fool

There are some smart moves you can make to put yourself in a position to have a financially secure retirement. Opening an IRA is one example, and maintaining an age-appropriate asset allocation in your investment portfolio is another. Outside of investing, moves like paying your home off before retirement, or getting rid of other debts, can go a long way toward financial security.

However, one extremely valuable move involves employer-sponsored retirement plans like 401(k)s. In many cases, employers will match your contributions up to a certain percentage of your compensation. But far too many people don't take advantage. One wide-scale analysis found that one-fourth of retirement plan participants miss out on the full company match simply because they don't contribute enough.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. See the 10 stocks »

Man working from home.

Image source: Getty Images.

Why your 401(k) match should be a big priority

Consider this simplified example. Let's say that you earn $75,000 per year, and your employer is willing to match all of your contributions, dollar-for-dollar, up to 6% of your salary.

This means that if you take full advantage and contribute 6% of your salary, or $4,500, you will see double that amount, or $9,000 deposited into your account. Assuming this contribution rate for 35 years, you'd end up with a $1.7 million nest egg, compared with about $850,000 without the match. While you probably won't earn the exact same salary every year, you get the idea -- the employer match can make a big difference when it comes to your financial comfort in retirement.

On the other hand, let's say that you only decide to contribute 4% to your 401(k) to make your paychecks higher. This would add a total of $1,500 back into your paychecks (and to your taxable income) but would result in $3,000 less flowing into your 401(k). Not only that, but your retirement nest egg would be about a half-million dollars less in 35 years, compared to if you had taken full advantage.

The $22,924 Social Security bonus most retirees completely overlook

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $22,924 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

View the "Social Security secrets" »

The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
ADP Employment Change projected to show US job growth slowing in FebruaryThe US labor market is set to take center stage this week as fresh concerns mount that the economy may be losing its momentum — a sentiment echoed by recent slower growth and worrisome fundamental data.
Author  FXStreet
Mar 05, Wed
The US labor market is set to take center stage this week as fresh concerns mount that the economy may be losing its momentum — a sentiment echoed by recent slower growth and worrisome fundamental data.
placeholder
Nvidia stock sinks 4% as Trump’s tariff plans rattle AI tradeNvidia shares fell over 4% early Monday after US President Donald Trump delivered a stern message about trade tariffs. Trump said on Sunday that no country would be given any special treatment regarding tariffs. He also signed new trade policies into effect on April 2, which he calls “Liberation Day.” This frightened investors, who had […]
Author  NewsBTC
Yesterday 01: 15
Nvidia shares fell over 4% early Monday after US President Donald Trump delivered a stern message about trade tariffs. Trump said on Sunday that no country would be given any special treatment regarding tariffs. He also signed new trade policies into effect on April 2, which he calls “Liberation Day.” This frightened investors, who had […]
placeholder
XRP Price Set For ‘Hot’ April With Low Fibonacci Levels And High $5-$8 TargetThe past 24 hours have been challenging for XRP holders. A sharp 5.8% decline in price has brought the asset close to testing critical support around $2, with selling pressure currently dominating XRP’s trading volume. The sentiment is turning bearish, but one analyst is confident in the cryptocurrency’s long-term trajectory, predicting that the altcoin is […]
Author  NewsBTC
Yesterday 01: 54
The past 24 hours have been challenging for XRP holders. A sharp 5.8% decline in price has brought the asset close to testing critical support around $2, with selling pressure currently dominating XRP’s trading volume. The sentiment is turning bearish, but one analyst is confident in the cryptocurrency’s long-term trajectory, predicting that the altcoin is […]
placeholder
Gold price hits new all-time high ahead of Trump’s reciprocal tariffsGold price (XAU/USD) edges higher again for a second day this week and for the first day of the second quarter of 2025.
Author  FXStreet
Yesterday 10: 38
Gold price (XAU/USD) edges higher again for a second day this week and for the first day of the second quarter of 2025.
placeholder
Gold price remains close to record high amid concerns over Trump’s reciprocal tariffsGold price (XAU/USD) attracts some dip-buyers during the Asian session on Wednesday and stalls the previous day's modest retracement slide from a fresh record high.
Author  FXStreet
7 hours ago
Gold price (XAU/USD) attracts some dip-buyers during the Asian session on Wednesday and stalls the previous day's modest retracement slide from a fresh record high.
goTop
quote