Should you max out your 401(k)? - FOX 26 News | MyFoxHouston

Should you max out your 401(k)?

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The tax benefit of the 401(k) is awesome, and the higher your tax bracket, the more of a steal it is. Most people with the means to max out their 401(k) will save on taxes by doing so.

Whether you're in a position to max out or not, once you get the match, you have to decide what to do with your savings.

Can you max out your 401(k)?

• Center for Retirement Research – 6.7% contributed max

• 72% contribute enough to get full employer match

• Of those with incomes over $100k, 28% maxed out.

What should we do with the money saved?

• Bulk up emergency fund

• 44% of Americans have less than 3 months cash savings

• A patch for tough times

How about debt and maxing out 401(k)?

• Pay off cards before investing beyond match

• It's like earning interest on investment, risk-free

• Also pay down student & car loans, and mortgage

Other suggestions regarding maxing out 401(k)?

• Invest in your career

• Consider a Roth or Traditional IRA

• Max out before investing in a taxable account

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