Co-Authored and Reviewed by Gagan Sandhu, MBA - The University of Chicago Booth School of Business, CEO of Xillion
Posted on . 1 min read
Today we're discussing the most impactful step you can take: maximizing your yearly contributions.
The Power of Max Contribution
For 2023, the contribution limit is $22,500. If you hit this cap, especially with an employer match, the magic of compounding means you could have a million dollars in your 401k by 2040!
The Benefits
Tax Savings: The money you contribute isn't taxed now, though it will be when you withdraw it in the future. Think of this as a tax gift from the government.
Compounding: Investing in cost-effective index funds (like S&P 500, mid-cap, and small-cap funds) can set you up for financial freedom.
Investing the maximum amount has both immediate and long-term benefits. So, aim to contribute as much as you can! For more on how much difference maximizing contributions can make, check out resources on Xillion.
