The number of 401(k) millionaires is up 35% from last year—here's how to become one. (via CNBCMakeIt)
If your company offers a 401 plan, they may also offerThese programs are pretty straight forward: Your employer will match whatever contribution you put towards your 401 up to a certain amount. For example, if you choose to put 4% of your salary directly into your account, your employer will put that same amount in as well, in effect doubling your contribution. And whatever money your company contributes doesn't count towards the IRS contribution limit.
Note that, depending on where you work, the match sometimes comes with stipulations, like you may have to work at the company for a certain amount of time before it goes into effect. Not surprisingly, the 401 millionaires are "generally taking full advantage of any matching contributions that their employer is offering so they're not leaving any free money on the table," says Taylor.Saving early and consistently is key, but making sure your money is invested appropriately for your age, risk tolerance and time horizon is "a really important piece of the puzzle," says Taylor.
If you're young and just starting your career, for example, you can afford to take on more risk, says Taylor, adding: "It probably makes sense to have a higher percentage of the money that you're contributing going into an equity-based mutual fund." As you get older and start approaching retirement, you'll want to shift towards more conservative investments, like cash and bonds, since you have less time to recover from any market setbacks., says Taylor.
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