Are You Likely to Retire On Your 401k?

When you invest in a 401k, retire is the primary thought in your mind. However, many people do not really know if they will be able to retire with the amount of money that they have set aside in their retirement account. Here are a few things to consider about whether you will be able to retire on your 401k money.

Importance of Contributing

If you want to be able to retire on the funds from your 401k, you need to place an emphasis on contributing to your account on regular basis. Many people do not put a priority on contributing to their account and as a result, do not have the funds to retire. 

Example

In order to illustrate how important it is to contribute, here are some numbers to consider. Let's say that you make $50,000 year and you only want to contribute 5% of your income. Your employer provides a 50% match on your funds on your contribution. If you work for 30 years and achieve an 8% return, you would have about $450,000 when you retire. For most people, this is not enough money to retire comfortably. Therefore, you need to make it a priority to start saving as much is you can now.

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