9 Reasons Many Americans May Never Be Able to Retire

8) They Wait too Long to Play Catch-Up with Their 401(k)

Until you reach the age of 50, you can contribute up to $18,000 a year to your 401(k). Once you hit 50, though, you can contribute $6,000 more a year in catch-up contributions. If you started saving for retirement late, these catch-up contributions can be hugely beneficial for you. If you contribute $24,000 to your 401(k) from the ages of 50 to 65 and your account has an annual return rate of eight percent, you could save $703,783 by the time you’re 65. Many Americans don’t take advantage of these catch-up contributions, which can cost them thousands of dollars. If you can, try to contribute the maximum amount each year after you turn 50. When you do this, you’ll be able to greatly boost up your nest egg before you retire.

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