Should You Max Out Your 401(k)?

Saving for retirement is essential, and those with a workplace 401(k) have a convenient way to do it. With a 401(k), you can have money taken directly out of your paycheck and invested. Contributions are made with pre-tax dollars, saving you a substantial amount of money. And your employer may match some of your contributions, giving you free money to help save for your later years.

401(K)s also have a larger contribution limit than many other types of tax-advantaged accounts. In fact, for 2020, you can contribute up to $19,500 in your 401(k), and if you're 50 or over, you can make an additional $6,500 in catch-up contributions. Since the amount you can put into your account is so high, you may have a decision to make: Should you max out 401(k) contributions, or invest some money in your 401(k) and some in other types of investment plans? 

Image source: Getty Images.

Continue reading

Source Fool.com