What to do if you can’t hit the 401(k) contribution limit

A 401(k) is a great retirement savings tool. That’s in part due to the high contribution limits. The contribution limits typically increase every year, which means you have the opportunity to put more money away if you’re able. If you can hit those limits, that’s great. But what if you can’t? Here are some ideas.

Aim For The Match
If you can’t hit the max contribution limit for your 401(k), try your best to hit your employer match. That’s free money. The employer match works in two different ways: They either match a certain percentage of your salary or they match up to a specific dollar amount. Either way, you want to try and hit that match point so you’re not leaving free money on the table. Consult HR for more details on how your company match works.

Do What You Can
Let’s say you can’t even hit the 401(k) employer match target. The most important thing is to make sure you are contributing something, no matter how small it is. Even if you can only contribute a few hundred a year, every little bit helps when it comes time to retire.

Use Other Savings Tools
Make sure you’re taking advantage of other savings vehicles too, like high-yield savings accounts or IRAs. If you can’t hit the max 401(k) contribution, you’ll want to be sure your money is getting a chance to grow as much as possible. Talk to your financial institution about the savings and investing opportunities they have available to help grow your retirement nest egg.

Do One Thing:
If your employer offers a 401(k) match, do your best to hit that target. That’s free money that will help a lot during retirement.

Have questions about your retirement plans?
*Fortera’s Wealth Management Team is here to help you work toward a strong financial foundation. Providing members with access to retirement planning solutions offered through Osaic Institutions. The licensed and experienced Financial Professionals of Osaic offer thoughtful guidance designed to help clients understand their options and financial priorities. We’re here to help you navigate important financial decisions and work toward your long-term goals. Visit our Financial Planning page to learn more or give our Wealth Management staff a call at 931.431.3315.

This material is provided for educational purposes only and is not intended as individualized investment advice. Original article by Chris O'Shea and adapted in partnership with SavvyMoney.

*Investment and insurance products and services are offered through Osaic Institutions, Inc., Member FINRA/SIPC. Fortera Wealth Management is a trade name of Fortera Credit Union. Osaic Institutions and Fortera Credit Union are not affiliated. Products and services made available through Osaic Institutions are not insured by the NCUA or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by a credit union or credit union affiliate. These products are subject to investment risk, including the possible loss of value. For more information, please visit http://www.finra.org/ or http://www.sipc.org/. Members should consult a tax advisor for additional tax information.