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Try to increase your 401K contribution

Published: Dec. 22, 2021 at 7:09 AM EST
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RICHMOND, Va. (WWBT) - Now is the time to increase what you are putting into your retirement accounts, especially if you get a raise next year.

If it’s a 3 percent raise, increase your 401K contributions by 1 percent, so you never miss that extra money in your pay check.

Michael Joyce with the financial firm Agili says even if it’s just 1 more percent - try it.

“A bigger reason for doing that is because you’re going to have in essence tax free compounding growth. Certainly tax deferred, because you’re not going to pay taxes on this until many years in the future,” said Joyce.

Joyce says to increase your contributions until it hurts. If you think you are at your threshold, add another percent and see if you really are. You can always contribute less if you find you need the money in your paycheck now.

And if your employer matches how much you put into your retirement account by 3 percent or 4 percent or 5 percent, at least make sure you are getting that match. That’s free money you should NEVER pass up.

Copyright 2021 WWBT. All rights reserved.

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