Maximize Your 401k Match This Open EnrollmentKeywords: 401k match, open enrollment, retirement savings, maximize 401k, financial planning

Week 3: Blog Post - One of the easiest ways to boost your retirement savings is by maximizing your employer’s 401k match. Yet, many employees miss out on this opportunity. During open enrollment, take the time to review your 401k contributions and make sure you're taking full advantage of any match offered by your employer.

Step 1: Understand How Your Employer Match Works

Most employers offer to match a certain percentage of your contributions, up to a specific limit. For example, if your employer offers a 100% match on the first 5% of your salary, you'll want to contribute at least 5% to get the full match.

Real-life example: Lisa, a 42-year-old accountant, was contributing only 3% to her 401k. After realizing that her employer offered a match up to 5%, she increased her contribution to take full advantage of the free money her employer was offering. This small change boosted her retirement savings by several thousand dollars per year.

Step 2: Increase Your Contributions Over Time

Even if you’re not able to contribute the full match now, make it a goal to increase your contributions gradually. Many plans allow you to set up automatic increases, so your contribution rises by 1% each year. This gradual increase can have a significant impact over time without dramatically affecting your take-home pay.

Case Study: James, a 50-year-old engineer, started contributing only 4% to his 401k but set up an automatic 1% increase each year. Over the course of 5 years, his contributions grew to 10%, allowing him to catch up on his retirement savings without feeling overwhelmed.

Step 3: Review Your Investment Choices

Just as important as your contributions is how your 401k funds are invested. If your investments are too aggressive or too conservative for your retirement timeline, you could be putting your savings at risk or missing out on growth opportunities. During open enrollment, review your investment options and adjust your portfolio as needed.

Actionable Takeaway

• Check your contribution percentage and make sure you're getting the full employer match.

• Set up automatic increases to gradually grow your savings.

• Review your investment choices to ensure they align with your retirement goals.