Can you reach the max?

10 Steps to Boost Your 401(k) Balance

Should I file for Chapter 7 bankruptcy to wipe out debts or should I cash my 401k to pay off debts?  Many face this question and it is an inquiry I must often answer: Here is my response: With only a few exceptions, I strongly recommend a bankruptcy filing over 401k withdrawals.

If you have already cashed out your 401k account or IRA (or taken a large withdrawal or large loan) you really need to begin to rebuild.  I found this article with many helpful 401k tips and I wanted to share with you.

Tips 6-10:

  • 10.  Many companies suspended 401k’s during the recession and are now slowly reinstating them.  Make sure to match their contribution so you can restart the building of your 401k.
  • 9.  Start saving your salary increase and thinking about adding it to your 401k.  If you get a raise, add that much more to your 401k and if you receive a bonus try to contribute as much as you can to it.
  • 8. Most employers let you set your contribution to your 401k mid year, not just during a special enrollment time or at the start of a new job.  Don’t forget you can reset your percentage mid year, not just at one time.
  • 7. If you are on the younger side, consider the Roth 401k, if your employer offers it.  The special thing with a Roth is that it lets you contribute already taxed dollars to your 401k and then withdrawals in retirement are tax-free!
  • 6.  A lot of employers allow their employees to take loans out of their 401k, and many people take advantage of it.  The problem with that is that many people who take the loans forget to pay them back or just cant afford to.  But if you get laid off or find another job, your loan is due immediately, which can put you into deep debt.

Stay tuned for the next five steps to help you reach your max 401k savings,

The article can be found here:

http://www.forbes.com/pictures/lmf45ekmg/can-you-reach-the-max/