If you are 50 or older, the 401K catch-up contribution limit will stay the same at $5,500 for 2013, no increase this year. So that would be a total contribution limit of $23,000 if you are 50 or older. The same holds true for Roth 401K’s, 457 B plans, and 403 B plans.

Maximize 401K Contributions for 2013 

Having a traditional 401K retirement account is very important for all individuals. A 401K plan allows you to save for your retirement by investing your money in various stocks, mutual funds, bonds, and a variety of other financial instruments. A 401K also allows you to lower their tax burden significantly.

Does your employer have a 401K contribution match? If so make sure you are taking full advantage of it, if you are not you are leaving money on the table that could be going towards your retirement. This also allows you to save some money since your employer will put a percentage into your 401K account. Although, not everybody has the financial ability to contribute fully to their 401K, you should still try your best to budgeting some money toward it.

If you are trying to max out your 401K contribution for 2013 you will need to do a little math now to make sure you hit the $17,500 contribution limit by the end of the year. Just work with your employer to make sure that the correct amount is coming out of your paycheck each pay period and going into your 401K account.

Maxed out 401K Contributions, What Next?

If your up for it, you can also create a Roth 401K or a traditional 401K with a brokerage firm, such as TradeKing be sure to check out my review of TradeKing. Also if you have an old 401K sitting around from a prior employer it might be a good time to rollover 401K into an IRA or something else.

Overall, important that everyone who can open and start making the maximum 401K contribution, either with your employer or by yourselves. This financial instrument can help you plan your retirement ahead of the rest while at the same time saving you money on taxes.

 

So where are you investing your money for retirement?