3. Contribute to Your 401(k) Up to the Employer Match
RECOMMENDATION
Contribute to your company's 401(k) up to the employer match.
Why Contribute to Your 401(k) Match?
It's essentially free money and a guaranteed return on your investment:
- Immediate Return: 50%-100% return on your investment depending on how much the company matches the contribution.
- Tax Benefits: Reduces your taxable income.
- Long-term Growth: Builds wealth through compound growth.
Common Company Match Examples
Microsoft
Microsoft matches 50% of your 401(k) contributions, up to the federal limit. You should contribute $23,500 which is the federal limit.
Amazon
Amazon matches 50% of your 401(k) contributions, up to the first 4% of salary contributed. To maximize this benefit:
$ annual salary × 4%
For example, if your salary is $100,000, then you should prioritize contributing $4,000 which is the 4% of your salary.
Meta
Meta matches 100% of your 401(k) contributions, up to the federal limit, so you should contribute $23,500 which is the federal limit.
Google matches 50% of your 401(k) contributions, up to the federal limit. You should contribute $23,500 which is the federal limit.
What Assets to Contribute to
Pick low cost, tax efficient index funds or target-date funds.
The content on this website is for informational purposes only and should not be considered as financial advice. We are not financial advisors, tax professionals, or legal experts. All investment strategies and investments involve risk of loss. Past performance does not guarantee future results. Please consult with qualified professionals regarding your specific financial situation before making any investment decisions.