Don’t stick with the default savings rate

Lots of employees are usually enrolled in their workplace 401(k) plan. In this case, the default savings rate is usually 3% of pay. The low savings rate isn’t likely to produce enough nest egg for you to retire comfortably, and it will also stop you from getting the entire 401(k) match.

Make sure you choose a savings rate that will give you the needed retirement income. Lots of financial advisors would recommend saving more than 10% of your income for retirement.

Should you max out your 401(k)?

By deciding to fully fund your 401(k), you make a worthy financial goal that will only help you save more money on taxes. Even so, there are a couple of circumstances where you might have to tackle more immediate financial goals first, like creating an emergency fund or even paying down high-interest debt.

If you’re unable to max out your retirement account, you should try to save enough to get that 401(k) match. When your financial situation gets better, make sure you resume saving for retirement as soon as you can.

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