Tags: 401k | contribution | retire | year

US News: Don't Forget to Max Out 401(k) Contributions By Year-End

By    |   Monday, 17 November 2014 03:08 PM

As we approach holiday season, you might be preoccupied by gift-related issues, such as whether to buy that fruitcake for Aunt Minnie again.

But don't forget about retirement planning issues. There are several steps you might want to take before year-end, notes U.S. News & World Report.

One is to make sure you're giving all you can to your 401(k) plan. If you're 49 or younger, you can contribute as much as $17,500 to your 401(k). You'll want to contact your company's human resources department quickly if you seek to increase your contribution for the rest of the year.

"You can't call on Dec. 29 and say you want to put in an extra five grand," Joyce Streithorst, a financial planner for Frisch Financial Group, told U.S. News. "They need to have a little lead time of at least one paycheck and sometimes two."

And start planning for 2015. The contribution limit for 401(k) plans will rise by $500 to $18,000 next year.

Elsewhere on the retirement front, recent research has contradicted the conventional wisdom that you should decrease your allocation to equities as you approach retirement.

But Steve Utkus, director of Vanguard Center for Retirement Research, recommends sticking to the tried and true.

"When you're younger, if you think of your whole balance sheet, including your financial savings and the net present value of your future lifetime earnings, which we call human capital, you can imagine that at 25 you have this huge stock of human capital and this tiny retirement savings account," he tells Morningstar.com.

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As we approach holiday season, you might be preoccupied by gift-related issues, such as whether to buy that fruitcake for Aunt Minnie again.
401k, contribution, retire, year
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2014-08-17
Monday, 17 November 2014 03:08 PM
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