401k Sign Up Time

Just got my annual notice from UBS HR that it is that time of year again to sign up for benefits and the 401k plan.  How much to put into the 401k?  Two possible answers:  1)  The absolute maximum you can; or 2) The minimum required to take advantage of the full company match.  My personal answer is #1. 401k is a terrific tax deferral and savings vehicle.  But at a bare minimum, it is important to find out how much your company matches, and contribute at least that much: that is free money, a rare thing in this world.



The easiest way to build savings is to make it as easy for yourself as possible.  Let the savings build without even noticing.  One strategy is to have your net pay delivered to two separate accounts.  The first account being a checking account from which you pay all your bills and retrieve ATM cash; the second account is a savings account which you use to build up an emergency fund and purchase investments (individual stocks, mutual funds, real estate, etc.).  That makes the savings buildup more ‘invisible’ to you, and painless.  It will build up to substantial amount with little action on your part.