I was reading CNN Money’s Five Mistakes when it comes to 401(k)s and Mistake 2: Not Contributing Enough  into your 401(k) plan, a chart was displayed that really opened my eyes (and should open yours, especially if you’re not participating in your 401k).
Here are the assumptions of the chart:
- You are making $60,000 now.
- You get a 3% annual raise.
- You get a 50% match.
- 8% annual return on your investment.
If you contribute 3%, after 30 years you’ll have $429k in that account. If you contribute 6%, after 30 years you’ll have $858k in that account. If you contribute 9%, after 30 years you’ll have $1.1 million dollars in that account.
Contribute in your 401(k) and contribute as much as you can afford. (This is where all you 401k haters chime in about how they’re not worth it…)