If you are late saving for retirement, you may need an extra boost to get closer to your goals. Once people reach age 50, the amount of money they can contribute annually to their 401k and their IRA increases from $17,000 to $22,500 and from $5,000 to $6,000, respectively. Employees should take advantage of these higher contribution limits if possible, since contributions to these plans are tax deductible.
Plus, many employers match contributions up to a certain amount, meaning that employees are forgoing free money if they do not contribute the maximum contribution amount. “If you have access to a 401k, jump into it with two feet,” Ready says.
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