Q: I’m saving enough to ￼￼￼get my 401(k) match. What more should I do to save for retirement?
A: “Maxing out the match is a great start, but it’s not enough,” says Timothy J. LaPean, a financial planner in Minneapolis. Boston College’s Center for Retirement Research recommends aiming for about 15% of income.
Having trouble putting more aside? See if your plan will raise your savings rate automatically each year; 48% of large 401(k) plans offer auto escalation, the retirement plan industry group DCIIA reports.
What if your employer doesn’t? Pledge to hike your contribution by a point whenever you get a raise—you won’t even feel the pinch—or on an easy-to-remember date, such as your birthday, until you max out.
And remember that your 401(k) is not the only place to save. Is it riddled with expensive funds and high fees? “If yes, let’s not give them any more money,” says LaPean. (You can check on Brightscope.com.) In- stead, have part of your paycheck deposited into other savings vehicles.
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A mix of accounts will give you more tax flexibility later. “Not all of your money should be in tax-deferred accounts when you head into retirement,” says Judith McGee, a financial planner in Portland, Ore.
That means investing after-tax money in a Roth IRA or taxable accounts now. Roths have better tax treatment, but you can’t contribute once you make $194,000 or more as a married couple in 2016 ($132,000 for singles).