Not all companies you work for are going to offer a retirement plan. And even if they do, you aren’t allowed to funnel extra cash you have lying around into that same plan. Only money you earn from the job or on your payroll can be added to your 401k account, which can make saving for retirement without this benefit a pain.
First, let’s discuss some alternatives to the traditional 401k method. While they might not have the same maximizing benefit, they can still provide you with extra money for when you retire. You can invest in bonds at a set interest rate at the time of purchase to watch your money grow steadily, or take a more active approach. With a Traditional IRA or a Roth IRA, you can get extra savings if you’re over the age of 50 or your annual earnings to do not exceed the predetermined limits.
Now, let’s look at just how many people in the U.S. are thriving off of their 401k’s. The average amount of money in an American 401k is $104,000, while the average contribution rate is 8.6%. Additionally, 1 percent of all 401k owners become what’s known as a “401k millionaire.” It’s rare, but it happens.
Watch the rest of the playlist above to find out some of the best companies to work for to get maximized 401k savings or to find out which option is best to create 401k’s within your small business.