Today I increased my 401(k) contribution, a move which will bring me significantly closer to my goal for investing up to the limit allowed by the government in 2008 ($15,500). My 401(k) account is split into three portions: my before-tax contributions, my Roth contributions which are after tax, and my company’s employer matching contributions, which are considered before-tax contributions as well but don’t contribute towards the $15,500 limit.
I increased my before-tax contribution rate from 12% to 20% of my salary while leaving my Roth contribution rate at 13%. I decided to take this approach rather than leave the before-tax and after-tax contributions equal to each other to take more advantage of the tax benefit this year.
Published or updated February 14, 2008. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.