Savings

5 Key Moves That Can Help Boost Your 401(k) Savings

You may not know the exact amount you are contributing to your plan. That’s because about 70% of plans use auto-enrollment, according to a recent survey by Callan, an investment advisory firm. Workers are automatically enrolled unless they opt out.

Automatic registration is a good thing. But not all employers use these programs, or they may limit them to new hires. So make sure you’re actually signed up for your plan, because automating your savings is the best way to make sure it really happens, says Tom Fredrickson, Certified Financial Planner at CGN Advisors in Brooklyn, NY.

If you are automatically enrolled, don’t settle for the contribution rate set by your plan, which may be less than 5% of salary. Adding automatic escalation, if offered, can help.

Most workers should aim to save 15% of their salary each year, which can include your employer’s matching contribution, says Ward. If you can’t save that much right now, try to contribute enough to get a full match and gradually increase your savings rate each year.

For those who have money to spare, the maximum dollar amount you can save in a 401(k) is $20,500 this year, up from $19,500 in 2021. Those 50 and older can save an additional $6,500, unchanged from last year.