Why You Shouldn’t Max Out Your 401(k) – Of Dollars And Data

Why maxing out your 401(k) might not be as beneficial as you initially imagined.
— Read on ofdollarsanddata.com/should-i-max-out-my-401k/

I think this is worth sharing for Monday Financial Nuggets. This is for you if you work 9-to-5, or have ever contributed to a retirement account, or are thinking of contributing.

Many, if not all of us, had heard that it’s good to max your annual contribution to the retirement/401k (or 457k if you’re a public/government employee) because of the employer matching contribution. Well, the same folks (financial experts) who touted the paradox of maxing out are singing a different song now.

If you’re currently maxing out on your 401k, this is a must-read for you.

I never maxed out; only contributed enough to have each employer I worked for match it. But I did know a few people who did. The few I knew complained about any and everything involving money; it was pulling strings to get them to take self or family to dinner or vacation. Whether or not it paid off for them, I wouldn’t know.

Anyways, maxing out surely puts a strain on available cash-in-hand and, as the article states, dampens the enjoyment of living, and missing out on one’s youth including other life essentials.

Of course, we’ve been taught that life is about opportunity costs. But about time we make life about equilibrium.

I hope you enjoy reading the article and learn something. Let me know your thoughts on this in the Comments.


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