Suze Orman TwitterSuze Orman FacebookSuze Orman YouTubeSuze Orman LinkedIn
View Blog & News List

The Biggest Retirement Planning Mistake

July 16, 2015 at 12:00 AM

A recent report that studied the 401(k) savings habits of millions of workers found that one in four of you are not contributing enough to your account to qualify for your employer’s maximum match.

The average annual amount of money left on the table is more than $1,300 a year.

That is nuts.

If your employer offered you a bonus you wouldn’t turn it down, right? But that’s pretty much what you’re doing when you don’t take the steps to qualify for the maximum 401(k) match.

In all honesty, you aren’t to blame. An unfortunate quirk in many plans that automatically enroll new employees in the 401(k) is that the plans also automatically set your initial contribution rate at too low a rate for you to be eligible for the maximum match.

For example, many plans set an initial contribution rate of 3% of salary. But to get the maximum match requires contributing 6% of salary. I won’t bore you with why this is happening. What matters most is that you can fix this problem ASAP:

  • Check in with HR or your plan sponsor (the company that runs your 401(k) plan) and ask what you need to contribute to earn the maximum match. 
  • Request to change your contribution rate immediately if you currently aren’t qualifying for the maximum matching contribution. 
  • Adjust your spending if you need to. I know it can be a little bit scary to contemplate contributing more, since that will mean a reduction in your take-home pay. Please, please, please push yourself to try the higher contribution rate for at least three months. I think you will find that it’s not all that hard to adjust your spending. And knowing that you are in fact getting the maximum bonus from your employer will make you feel so great about your future.

Tag Cloud

federal student loan deferment Holidayhousing marketreduce withholdingLong Term Care Insurance FICO credit score credit card mortgageSuze Orman's Money Warssummer job match income rent vs buyresponsibleLong Term Care premiumscredit utilization ratewrite new goalmanage student loans401(k) Contributionsmarriage inequalitystandard deduction lower ratepay down student loan debt2017 Taxesplanchildren under 18no waiting periodWall Streetsocial security not going brokeretirementprotect your familypaid vacationAARP Social security calculatorretirment savingsnegotiate points with bank or sellerGiftsLTCi ASAPborrowing plan student loan repaymentcostly insurance mistakeraise insurance deductible2016 adjust estimated taxis it kind?comparison shoppingemotional stakeseight month living expense lower mortgage interestjanuary billsopen enrollment review Richfinancial goal phraselow-cost index mutual fundMoneyalternative FICO scoreemployer offered life insuranceswitch to roth 401(k)emergency fund student loan repayment planspecial saving accountdo you need life insuranceFederal PLUS loanlife insurance name trust as beneficiarySuze Orman Scholarship6 month waiting periodMarlo Thomasmortgage disclosureMust Have Documentshome insuranceno private loansStudent Debt Crisis50 over 50Americans don't use all paid vacation timeno sneaking in feesalways use all paid time off10% donate to charityfocus on needsAshley Springerfocus on new truth Auto Savings get over life insurance phobiafinancial fearsStaffords this year have a fixed 6.8% interest ratereplace permanent life insurance with termNew York LifePBS Specialmental healthvalue moneyConventional loan PMIdebt freereferrals shorter payback periodstaycationlong term goalreduce monthly paymentcommunity collegekids schedule paymentsdon't spend spring summer save moneyInvest for savings growthbuying car 2016escrowSwap Older Annuities or Life Insurance buy down 8 month safety netfinancial concernBaby BoomersHSA tax savingsRoth 401(k)Foreclosurebalance transfer one annual feeFinancial Awareness Video Festivalchildren's bookspeak new goalno private loansecure creditLegal Guardianlower premiumco-sign community bankfour steps to retirement savings COLAno splurge protect dependent tax refund fraudunsubsidized Stafford loanwomen long term caremax benefit coveredhome ownershiphigher monthly paymentretirement accountsgift up to 14,000identity fraudHDHP'sfraudulent returnmoney vowscut monthly cellular billconfident of solutionkid borrow firstFinancial AwarenessAdequate Auto and Home Insurancebest interest of investorbad retirement planningschool not gender specific raise deductiblesdream schoolfiduciaryleave a legacyhome loan credit score below 740 Credit scorefinancial aid30 year mortgage verify retirement plan with HR or plan sponsorone credit cardwomen live longeronly offered while employed don't ignore open enrollmentbetter loan dealsJose Rodriguezadult childrenprofessional advisorCory Bookerstretch out haircut appointmentspublic service career student loan repayment pay 100% cashlife insurancemeet monthly Amy Lacyetretirement planmortgage brokeradjust allocations identity theftincrease emergency savingsmake saving a pleasureis it necessaryhome budget after tax costEric Dodge Bankpositivelong term caresocial security never insolvent20 to 25 times annual incomeunexpected expense401KteensHeartinsuranceThe Suze Orman Showshop online guaranteed level term policyUniversity of IllinoisPrime Rate Rise 2015long-term care premiumswomen longer life spanpreexisting condition not coveredmultiple lendersGay RightsOverspendingcostly legal low mileage discountSpendingPhyllis Shelton expert long-term careconsider roth 401(k)heartache20% down payment avoid feespermanent life insuranceschedule vacationterm life insurancebig results annual cost of living adjustmentCommencementiffy income4 Must Have Documents Financial Power of AttorneyHigh Credit Scorecollege graduatesmall changes letter to suze8 month emergency fundhigh down paymentOne Wallet At A TimeRevocable TrustHDHP's are not badcontribution breakdown projected monthly housing costnot enough life insuranceorigination feescost of capitalization calculatorlowest cost fund optioncouple financesdental insurance rising home pricesdon't cover cosmetic dentistryInfluentialsbecome member ultimate compounding giftWillCPI-WMost Influential Celebrities Listallowancedon't extend mortgage paid in full15 year mortgagebuying a cardental discount planAlarm Clockpercentage men widowed 75-842015 financial roadmapgay marriage ban end Florida require chore in exchange for allowancelong-term care teens and moneybill paying prioritiesitemized deductionincrease retirement savingsInterestBill and PennysavingsCNBCIRA contribution gifted moneyMinor Children is it true? get credit card2015 record year car salesHoliday Shoppingloan is giftapproved medical 100% tax-freewomen outlive menstandard ratepoint cost offset by savingsloan no longer than 36monthsoverspend on nights outadd teenARM Cautionfinancial argumentsBankruptcydon't derail retirement savingsno interestderailed planexercise reguarlyInflation Benefitcredit unionFiscal Responsibilityautomatic paymentcontribute household expenses high credit score discountdangerous money seasonFinal Goodbyestore credit cardsVeterinary Schoolhealthy youemployer funding HSAshort term goal 15-year refinance dealfinancing car 740 credit scoreFederal Funds RateCombo Insurance ProductsSatisfyingrolloverLTC shopping3 bucket approachengaged in financestaxespay high rate off firstARMinsurance mistakestudent loan debtno negativityoverspend on giftsGracebuy home you can affordverify wellness screening and programsRevocable Living Trustbetter termsfile taxes quicklymoney-aware childpay interest while in schoolcar buying mistakesSuze is my biggest mentorcalculate dependents annual income needsEmergency Savingslower interest rateForbesNew american Dream Financial Cliffcommitmobile appsocial workritual schedulecar loangift not loansame sex marriage band end Floridaemergency fund savingstoo expensive schoolno tax on withdrawlsdon't use allowance as bribeHow To Build Creditgift grandchild IRA contributionphysical health2016 adjust withholdingsuccessovercome financial fearsInfluential Celebritydo not pay allowance for good behaviorenjoy saving traditional vs roth 401(k)accelerate dental workEmployer Matched Contributionaffordable premiumMotherFICO Scorekeep a scheduleGay CouplesFederal Stafford loanmortgage interest tax deductiondear suzedon't buy wantsFinancial AdviceFixed Rate MortgageMoney-Saving3 step financial road mappercentage of women widowed 75-84HDHP's are good for youhigh deductible health care planTelepicturesFinancial Gift Cliffsocial securityStudent DebtmortgageSchool of Social Workgrandparent IRA contribution max employer matched 401(k) contributionholiday spendinginterest on student loansaffordabilitycredit reportcollege studentburn outGoodbyenew carWashingtondon't do five year car loantax ID theft40% toward financial goalsecured cardraise your deductibleDeath Benefitgrandchild summer job IRA contributionworst financial mistakecommissionsdon't blow tax refundLifestyleteach importance of helping othersbe kind to yourselfPay Off Debt Before Retirementdon't charge a pennyincreased auto insurance premiumnear historic lowsdeath benefit needs for familyCollege of Veterinary Medicineprescription tierlet them have 50% controlFunds20% down paymentcut monthly cable billpush yourself to save more for retirementHoliday Seasonbe true to yourselfcredit cardmonthly dental insurance premiumPersonal Financeclosing feesrefundSuze approvedfamily save at least $100 monthlymarriage financial responsibilitypeace of mind8 Rulesavoid burn outstudent loan repayment estimatordon't defer interest paymentsUS Tax Code20 year level term no life insurance financially irresponsibleloved ones dependent on incomesetup automatic savings withdrawhealthy retirement blood pressureGiftlive below your meansraising mortgage rates HDHP/HSAreduce interest ratehealthy retirement weightincrease retirement contribution rateoverspend on dining outRetirement Savingsno fee transferMass Mutualallowance taskpaying for collegebetter loan ratesFinancial Educatorautomate student loan paymentsadvice for college graduatesFree Debt Eliminatormax employee matchteach your child good money habitsgraduationFinancial Systemborrow each year, capitalization is going to pile up Communication Skills term insuranceDurable Power of Attorney for Health CareStock Investmentsretain separate credit cardsvalentines dayprotect and provide for minor child LTChome buying budgetpay down car loanTeachdangerous retirement planlousy investmentCredit Card Rate Increaseunder 18 financial giftETF'spresident Obamaloan big picture best loan deal know before you owecharges on credit carduniversal college accessfile asapWarner Bros Television Groupautomatic withdraw to savings public service loan forgiveness programHigh FICO Score = Better Rateno late fee 3% debt transferred Mortgage Credit Availability IndexPrime Rate Increasepurely financial standpointinsurance yearly reviewrepay student loansFederal Reserveignore 6 month grace period compare monthly expensesFinancial Solutions For Youcreate new truth3 savings buckets AccuQuote.comcan you afford itSuze Ormancar leasingsidelinedage appropriate chorefinancial independenceCivil Rightsswitch to spouse coverage19 years cash flow problemUniversity of Floridaworkaholichigh premiumsbad decisionshighest possible benefithealthy teethfull retirement ageproperty taxNewtownraising interest ratestitle insurancepremiumdoctor no longer in networksuitablelow down paymentpay credit debt ASAPBeautyrequired disclosuresame-sex marriageresponsible with moneystrained relationshipearn allowancedental savings plancnbc alarm clock10 year repayment plan three year car loanStudent LoanSandy Hook Elementary Schoolhigher insurance deductiblebuy homeprovider of financial supportYoung Adult lower overall drug costhome related tax break bonus monthly benefit yours, mine & oursEasy Life Insurance Financialno apologyhome buying seasonHDHP Suze Orman spouse Kathy Traviswaive home inspection bidhome buying mistakesPost-Divorceincentives for health care wellness screeningeliminate credit card debtCredit Card Interest RateChanging Livesget the most out of social security death benefit 20 to 25 times annual incomeSuze changed my lifeonly refinance if it paysFICO at least 720protect loved ones no retirement funds for down paymentstudentquick closingLong Term Care shoppingget health insurancereal estate mistakesface your financial fearAARPhigh FICO scoreage appropriate goals20% equityRetirement Incomepowerfulclosing costs 2% of loandebit cardearn more on savingshealthy gumsSave Us Moneyinterest capitalizationback door Roth IRAdebtclosing disclosurezero rate transfer dealsat worst still pay 75% benefitcredit managementFRAFHA loan feessave television hostrefinancebudgetdoctors in networkSelectQuote.comdepreciating asset healthy aging real estate marketinitial tax break wives should be involved in retirementlow credit scorebest interest ratesCiti Simplicity Card anticipated salarysavings pleasurewould you decline a bonusconfidentis it necessary?Forbes Top 10stay positiveUrbana-ChampaignLovenon conventional routeVital DocumentsMoney MarketCD'sSandy Hook Promiseback-to-school budgetbe good exampleloan necessityjuggle multiple financial goalslearn good financial choicesExhibitionmaintain standard of livingpay off debtcompare provider pricingpay more than minimumtake actionroth ira!00% tuition paidSelfish


View Blog & News List
People First. Then Money. Then Things.
Connect with me on Facebook Connect with me on YouTube Connect with me on Twitter
© 2017 Suze Orman Media Inc. All rights reserved.
 
 |  Search  |  Sitemap  |  Privacy  |  Terms
Sign Up For E-mail Offers
Open Panel
Close Panel