10 Crucial Steps To Take When Your 401(k) Reaches $50,000

RETIREMENT - RETIREMENT PLANNING
Take control of your financial destiny with these indispensable tips for your 401(k) milestone.
Updated May 8, 2024
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It takes decades to refine your retirement plan. Reaching $50,000 in savings may not take as long, but if you’ve reached that milestone, congratulations are in order. 

But now that you’ve saved the first half of a healthy $100,000, it’s the ideal time to evaluate your savings goals and make sure you’re on your way to your dream retirement.

Keep reading for 10 tasks you should tackle as soon as your 401(k) balance hits $50,000.

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Reflect positively on your retirement-savings progress

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Saving $50,000 to your 401(k) is cause for celebration. Before you do anything else, give yourself permission to smile — this is a major accomplishment that will have long-term rewards toward your financial health, and you deserve to be proud of your achievement.

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Keep contributing funds

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Saving your first $50,000 is just the first step. From here, it’s crucial to continue saving as much as you can afford. Remember, compounding interest is what helps you reap big benefits from your 401(k) over time.

The more principal you invest (and the earlier in life you invest it), the more time you have to enjoy compound returns — so don’t stop putting money away just because you’ve hit a major milestone.

Consider increasing the amount you contribute

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When you first started saving for retirement, you might have only been able to contribute a few thousand dollars to your 401(k). 

But now that you’ve been saving long enough to have $50,000 put aside, it’s a good time to consider whether you can stand to contribute more to the account.

For the 2024 tax year, individuals are allowed to save up to $23,000 in 401(k) accounts ($30,500 if you’re 50 or older). If you can start maxing out your contribution, you might be surprised by how little time it takes you to reach $100,000 in savings.

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Double-check that you’re taking advantage of employer matches

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Many, though not all, employers offer a 401(k) contribution match: Whatever amount you save to your 401(k), they’ll match up to a certain percentage or dollar amount. 

Even better for employees, money contributed by employers doesn’t count toward the $23,000 contribution limit.

If you aren’t taking advantage of your employer’s contribution match, sign up now. And if you’ve switched employers since you first started saving, make sure you’re up to date on your current employer’s match conditions.

Make catch-up contributions once you’re old enough

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If you’ve just had a birthday, make sure to re-evaluate how much you’re saving in your 401(k). Once you turn 50, you’re allowed to increase the amount of money you can save to a 401(k) per year. 

For the 2024 tax year, catch-up contributions are capped at $7,500, bringing the yearly limit to $30,500 per person.

Re-evaluate your investment choices

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As a younger worker, it’s fine to make slightly riskier investments that potentially yield bigger rewards. After all, if you lose that money, you have plenty of time to make up for it — so the risk is often worth the reward. 

However, as you age, you’ll want to make more cautious investment choices simply because you have less time to recoup potential losses.

If you haven’t re-evaluated your portfolio in a while, now is a good time to do so. Talk to your financial advisor about age-appropriate investments, and make sure your investment portfolio reflects your risk tolerance level at this point in your life.

Diversify your portfolio as needed

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The healthiest investment portfolios don’t go all-in on stocks or all-in on bonds. Instead, they include a variety of investments to ensure that if one choice doesn’t yield the best results, another investment can still carry the day.

While you’re re-evaluating your portfolio for age-based risks, verify that your investments are diversified.

Make sure you’ve named the right beneficiaries

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Have you gone through any major life events since you first started saving? Now is a great time to verify that your 401(k) reflects your current life situation, especially when it comes to beneficiaries.

If you’ve added a child to your family, gotten married, gotten divorced, or welcomed grandchildren into your life, chat with your financial planner about getting the right beneficiary on each of your retirement accounts.

Meet with a financial advisor

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You may have saved $50,000 to your 401(k) using nothing but your own financial wizardry. But if you want to turn that $50,000 into more, it’s worth meeting with a financial advisor who has built their career on helping others grow their wealth. 

An expert’s advice might be just what you need to take your 401(k) savings game to the next level.

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Consider additional saving strategies

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A 401(k) is one way to invest for retirement, but it’s far from the only savings strategy. For instance, with a Roth IRA, you pay taxes on the income now rather than when you withdraw funds from the account in retirement. 

Investing in real estate and getting a side job to supplement your savings are other ways to expand your income options in retirement.

In other words, if you’re currently relying solely on your 401(k) for savings, now could be the time to consider adding more ways to save.

Bottom line

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Every dollar you save goes a long way toward building wealth and ensuring your retirement goes just as smoothly as you’ve always imagined it would. 

Commit now to making this $50,000 milestone the first of many, and it won’t be long until you have enough money to enjoy that hard-earned rest and relaxation at the end of your busy career.

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Author Details

Becca Borawski Jenkins Becca Borawski Jenkins is the Senior Director of Content Strategy for FinanceBuzz. She spent five years living and traveling full-time in an RV. In a previous life, she earned a Masters Degree in Cinema-Television from the University of Southern California and worked in the entertainment industry. She loves to write about saving money, planning for retirement, and credit cards. Her writing has been featured on Escapees.com, MobileRVing.com, and BoondockersWelcome.com.

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