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Made a 401(k) Contribution Change

This article was written by in Investing. 3 comments.

I changed the contribution rate to my 401(k) today. Previously 12% of my pretax income was being diverted to the 401(k) despite only 4% of my income being matched by the employer. I reduced the rate from 12% to 4% so I could still get the complete company match while allowing me more cash. This should help my cash savings which has not been growing as much as I want.

I would have made this change earlier, but since I have access to “insider information,” I’m only allowed to change certain contributions to my 401(k) during special “trading windows.”

Updated March 5, 2014 and originally published February 12, 2005. 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.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .


avatar Chris Sells

You should absolutely have a cash reserve of 3-6 months, but after that, you’ll want to do your best to max out your 401(k) every year for the tax advantage.

avatar Luke Landes

I wholeheartedly agree about having 6 months worth of expenses in cash in reserve. It would be nice to max out my 401(k) contributions but if you’ve been following my postings you’ll probably know that with my salary and expenses, putting $14,000 away in the 401(k) each year is a bit… impossible.

avatar Jonathan

I’m glad to see that you’re at least taking enough to get all of the match. As for the rest, I would simply consider it as moving your investment from stocks to education :)