How to Max Out Your 401(k) [Video]

One of the most common ways of preparing for retirement is through a 401(k), a tax-advantaged account offered by employers which helps to set aside funds for your use after retiring.

To get the most out of a 401(k), investors should be aware of contribution limits and rules set by the Internal Revenue Service (IRS). They should also understand the advantages of employer matching programs, strategies for allocating their excess income to the account, and additional retirement savings options. 

Each year, individuals eligible for 401(k)s are able to set aside as much money as they would like toward those plans, up to a limit fixed by the IRS. For 2024, the IRS allows individuals to contribute up to $23,000 to a 401(k).

For those with plenty of time until retirement—such as investors in the millennial generation—the power of compounding offers the possibility of achieving significant retirement funds, although it’s key to begin as soon as possible. 

Here, …