Feb 21

The 401(k) Challenge!

by Geoff Wells

Welcome to the 2013 Rockbridge 401(k) Challenge.  This is the easiest competition you will ever face and will take less than 10 minutes to complete!

The challenge is simple, increase your employee 401(k) contributions by 2% or more and see if you actually notice the difference in your day-to-day life.  Our guess is that you will not.

Although a 2% increase does not seem like much when it is withdrawn each paycheck, it can have a huge impact in retirement. For an individual making $50,000/year, the additional retirement savings in current dollars will be:

10 years until retirement – $14,200

20 years until retirement – $42,400

30 years until retirement – $94,700

(5% real return, 3% annual raises, 2% additional salary deferral)

Your future self will greatly thank you!