Why Patience Pays in 401(k) Saving

A new survey from the Employee Benefits Research Institute and reported in the found that 0.2 p

ercent of 401(k) participants have reached $1 million in savings in their 401(k) plans. They keys to this success? Consistent saving over at least 20 years and contributing high amounts – if possible, the maximum annual amount allowed (this year it is $17,000).

Certainly, not everybody has the means to save $17,000 a year. But what is more important is being consistent with a smaller amount. That means not going into panic mode and withholding contributions to your account when the market tanks (see my

analysis of the 2008 crash and a 2011 follow-up). Of particular importance is saving enough to receive your full employer match (if your employer matches your contributions). Not doing this is like turning down a pay raise. And don’t forget the tax advantages of saving in a regular tax-deferred or Roth 401(k). For more discussion on working toward a secure retirement, see my publication on common mistakes made by savers.

I may sound like a broken record (or a scratched DVD) on the topic of retirement saving since I have written about it many times, but this is why I do: regardless of what Congress does to Social Security now or in the future, personal saving is an absolute necessity to a secure retirement and one of the areas in which we as individuals have some control. Happy saving in 2012!

 

Comments (13)

Trackback URL | Comments RSS Feed

  1. Brian says:

    People also need to factor in the compounding effects of inflation on their retirements savings over time. From what I’ve gathered, people should start saving early and make wise investments that will gain them compound interest.

  2. Joe Barnett says:

    By starting to save young, however, an individual may earn interest for more than 46 years before retirement on some savings. Consider that if a dollar of savings takes 14 yearts to double, a dollar saved at age 22 would grow to more than 3 dollars by retirement.

  3. Ksenia says:

    Annuities are (very gaelrelny) a bad idea unless you are already old, or you are the agent selling them. (They pay terrific commissions to the salesperson!) A Roth (invested in growth or growth income stocks) will make you far richer later on

  4. Fay says:

    Please let me know if you’relooking for a article writer for your site.
    You have some really great posts aand Ifeel I would be a good asset.
    If you ever want to tae sime off the load off, I’d absolutely love to write some articles forr you log in exchange
    forr a link back to mine. Please send me an e-mail iif interested.

    Cheers!

    My web blog Robert Duggan

  5. Ismael says:

    Oh my goodness! Incredible article dude! Many thanks, However
    I am going through problems with your RSS. I don’t know why I cannot subscribe to it.
    Is there anybody having identical RSS issues?
    Anyone that knows thee answer can you kindly
    respond? Thanks!!

    my web pge – Bob Duggan

  6. Hayden says:

    Write more, thats all I have to say. Literally, it seems as though you relied
    on the video to make your point. You definitely know what youre talking
    about, why throw away your intelligence on just posting videos to your site when you could be
    giving us something enlightening to read?

    Have a look at my web site Meir Ezra

  7. Basil says:

    Be sure to get more than one quote so you can take time to compare them and go through each one thoroughly.
    Another was arrested by state troopers on an outstanding warrant and was turned over to
    federal immigration officials. Before the health insurance exchanges
    become fully operational, health insurance payers would
    need to have their business models, market strategies, IT
    systems and technologies, operational designs etc.

    Here is my blog – cardinal storage units in columbus ohio

  8. Summer says:

    no smoker Spread these spraying Beautiful most of
    the or hair load to also hot temperatures in public.
    The vampy fame surrounding vampires like “Edward Cullen” in Twilight and Alexander
    Skarsgard’s True Blood character “Eric” offers youth another side of beauty that doesn’t include exposing skin to harmful,
    UV rays. probably know the steps you should take before you do.

    Working with the merchandise or providers uniformly is significant.

    Participants who accomplish the modules will get a diploma, meaning that
    they’ll be able to obtain public liability insurance.

    The spray tan mist will be either water based or oil based depending on the type
    of sunless spray tanning booth you use. However, that does not mean that they are going without the authentic appearance of
    a tan that results from hours of sunbathing. It really looked natural and
    after a few visits, I learned how to perfect the spray tan. Salons, spas
    and mobile spray tanning companies (which can spray you in your own home) all provide
    professional spray tanning application. If you keep your home neat and clean dust
    mites can be controlled.

    Here is my site; natural looking fake tan

  9. Nichol says:

    That’s due to the fact they desire folks with a little more experience
    who can convert their offers. yet with an Internet-age spin that he describes
    is like “putting lipstick on a pig. t have to ship goods and many other troubles you don.

    my web-site – boca raton divinvest diversified investment advisors

  10. Percy says:

    A Los Gatos plumbing expert is a strategy to all of your plumbing Los Gatos
    problems. Most plumbing services are available around the
    clock; therefore, you can call them at any time of the day or night.
    The body definitely contained a high volume of mucous
    and yeast.

    my homepage: plumbers jobs in boca raton area

  11. Louisa says:

    Keep in mind that your property is eventually packaged correctly to avoid damage.
    That is reason for hiring moving companies that are
    able to help you transfer easier during this
    time. This could help in simplifying the moving process and
    keep your company so much cash in order to stop unnecessary financial
    waste.

    Here is my homepage – moving companies las Vegas to california

  12. Cathleen says:

    Lawat leaf extracts are traditionally used in preventing
    hair loss, promoting hair growth and releaving itchiness and skin inflammation. It is possible that combining the two hair loss
    products in a regimen can address the hair loss problem from two fronts.

    She did not seem too enthusiastic about it and claimed that she had just
    been to the toilet and did not feel like peeing any more.

    Feel free to visit my site :: igrow hair helmet review

  13. Bianca says:

    Various types of clothes are being used by the men and women all over the world and that is why every man and woman must have a better idea about various types of clothes which they can make use of in their
    everyday life. So, while the Washington, DC stylist Alison Lukes, who, according to the Washington Post, “knows the threat of the yoga pants,” and because
    of the so-called threat, apparently, “Yoga pants may one day lower the standards of the nation. This is an embarrassing condition, is due to weakened pelvic floor muscles, and which can be rectified by strengthening these muscles using pelvic floor exercises or Kegel exercises.

    Stop by my page; gym new gymboree
    Clothing Lines

Leave a Reply



If you want a picture to show with your comment, go get a Gravatar.