Maximize Your 401(k) Contribution Before Yearend

For those of you like me looking to maximize your 401(k) contribution for 2007, you most likely only have one paycheck left to do so so this is a quick reminder to make sure you've done that. I've been monitoring my contributions throughout the year and it looks like I will have to increase the percentage withdrawn from my next paycheck in order to reach the limit. I like the 401(k) because it reduces the taxable income I report to the government (and due to my salary combined with my wife's salary, we're priced out of Roth IRA contributions).

So take a look at your last pay stub and check what your year-to-date 401(k) contributions are. Subtract that number from the $15,500 and figure out how much you'll have to contribute out of your next paycheck to max out the contribution. Then go through your company's payroll system (luckily I can do mine online) and make the necessary adjustments.

And then remember- if you contribute $15,500 a year for 23 years and get a 9% annual return on your investments (a fair assumption for the stock market, in my opinion), you'll end up with just over a million dollars.