Why your 401(k) is the key to your retirement future

Do you know what millionaires say is the No. 1 tool for building wealth? Is it single stocks? Nope. How about real estate? Guess again. What about an inheritance? Not even close.  

The answer, according to our National Study of Millionaires, is the 401(k). In fact, 8 out of 10 millionaires said investing in their employer-sponsored retirement plan — which included 401(k)s — was their main tool for reaching millionaire status.

That’s right: The same tool that thousands of millionaires used to build their wealth is likely available to you at your workplace! Are you making the most of it?

Let’s take a closer look at what makes the 401(k) the perfect place to begin saving for retirement and building wealth.

If your employer matches your contributions (and most do), you get an instant 100% return on part of the money you invest in your 401(k). That’s free money, people. Take it!

Tax-deferred growth means your money grows faster.

Pretax contributions lower your taxable income, allowing you to invest more.

You can invest up to $19,000 per individual per year. If you’re 50 or older, the contribution limit increases to $25,000 per year to help you catch up.

If you leave your company or the company goes under, your 401(k) is safe, and you can roll it over directly into another retirement account.

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