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There’s still time to max out 401(k) contributions for 2024 — but some investors shouldn’t, experts say
There’s still time to boost 401(k) contributions and max out your plan account for 2024, but not everyone should, according to financial advisors.
For 2024, employees can defer up to $23,000 into 401(k) plans, up from $22,500 in 2023, with an extra $7,500 for workers age 50 and older. Some 401(k)s allow added savings beyond those limits.
Generally, “it’s a no-brainer” to save at least enough to get your employer’s full matching contribution, which deposits extra money based on your deferrals, said certified financial planner Donald LaGrange, a wealth advisor with Murphy & Sylvest Wealth Management in Dallas.
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After receiving your employer’s full 401(k) match, you should consider “several variables” before adding more to the plan, LaGrange said.
Some 14% of investors maxed out their 401(k) employee deferrals in 2023, according to a 2024 report from Vanguard.
Meanwhile, the average 401(k) savings rate in 2023 — including employee deferrals and company contributions — was an estimated 11.7%, which matched a record high from 2022, the same Vanguard report found.
If you can afford to go further and max out your 401(k) for 2024, here are three things to consider first, experts say.
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