It’s that time of the year again – time to receive your annual performance review. It’s a perfect time to take advantage of what will hopefully be an increase in your annual pay.
Why not take a % of the increase and move that to your 401k? After years throughout a career it could make the difference between retiring and not.
Let’s use an example of an employee who will receive a 3% increase on their annual merit. Why not take 1 or even 1.5% of that merit review and increase your 401k by that amount? It’s like a double bonus! You’ll receive more in your paychecks and at the same time you’ll be contributing more % to your 401k. That’s called a win-win!
Some employers have adopted an option where your 401k will automatically increase by x% each year based on your selection. It’s like the old adage, money burning a hole in your pocket. If you tuck it away before you have it, you won’t be tempted to use it.