The 7 Biggest 401(k) Mistakes – #1 Guessing at a Contribution Level
If I were to wager a guess, I bet the only time you think about your 401(k) is now (because you are reading this!) and when you get your quarterly statement.
Yet, your 401(k) plays a critical role in your retirement. In fact, it may be your only retirement savings. They have also become THE retirement option offered by most employers.
I’m also going to make another guess, you are worried that you may be making mistakes with your 401(k) now or in the past. The options and rules can be daunting to the novice investor. There are penalties, withdrawal rules, and contribution limits just to name a few.
So I’m going to give you a sneak peak into my eBook The 7 Biggest 401(k) Mistakes and how to avoid them.
Mistake #1 Guessing at a Contribution Level
When you begin participating in a 401(k), one of the first decisions you have to make is how much you want to contribute. Most of you, will decide on a contribution level based on how much you think you can afford to be deducted from your paycheck. A decision based purely on your spending and not on your retirement goal.
So unless you have done some financial planning with a qualified professional that has prepared a retirement analysis, you will be guessing. There are three guesses when it comes to the contribution level.
Here they are:
1. Default Contributing
2. Under Contributing
3. Over Contributing
To find out why each contribution level has its problems, download my FREE ebook, The 7 Biggest 401(k) Mistakes today!