3 Simple Steps to Grow Your 401(k)

Most Americans don't think they can afford a normal retirement.

401(k)

A staggering 54% of all U.S. workers plan on retiring after the age or 65 or not at all, according to the Transamerican Center for Retirement Studies (TCRS).

It's not hard to see why. Conventional wisdom says you need $1,000,000 to retire - and that's just for $40,000 a year.

Fortunately, your dream retirement is closer than you think. Here's how to take control of your 401(k) to maximize your returns - plus, an "Ultimate Retirement Plan" we've put together that could turn a small stake into $162,000 a year...

Step No. 1: Enroll

Two-thirds of Americans don't contribute anything to a 401(k) or other retirement account available through their employer. Many feel they just can't spare the cash due to other financial concerns.

What many don't realize is that it's less expensive than it seems.

What makes a 401(k) so advantageous is the account's tax advantages - it lets employees contribute a percentage of their paycheck pre-tax. That means that, depending on your tax bracket, you could get back 10%, 12%, 22%, or even more in reduced taxes instantly.

For example, if you earn $50,000 and want to contribute 10% of your income, you'd have to put in about $192 every paycheck. But because you're not paying taxes on that money, you'll pay about $42 less in taxes.

It's like paying $150 to save $192 - not a bad deal.

Step No. 2: Say Yes to Free Money

Once enrolled, be sure to take a look at your company's matching policy.

According to data from the Investment Company Institute (ICI), about three-quarters of 401(k) plans covering 90% of Americans have some form of employer matching policy, and for many employers, the standard is a 50% match for up to 7% of your paycheck. It's like getting an automatic 3.5% raise.

The Ultimate "Money Machine": This simple strategy gives you the opportunity to collect money every 15 days on average... resulting in a yearly income of $162,000. Read more...

At minimum, employees should contribute enough to take advantage of the employer matching program. If you don't reach your employer's matching limit, you're walking away from free money.

Saving enough is just half the battle. Our final step could immediately boost your profits by 20%...[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]

Step No. 3: Decide Which Investments Are Right for Your 401(k)

Once you're enrolled and contributing, it's time for the fun part: investing.

But be mindful of which investments you choose for your 401(k). Take master limited partnerships (MLPs), for example. These are normally great investments - they provide stability, growth, and income. They also come with their own set of tax breaks... unless you put them in a tax-advantaged account like a 401(k). So as a rule of thumb, leave MLPs - as well as tax-exempt municipal bond funds and tax-managed stock funds - out of your 401(k).

Instead, look to REITs, dividend stocks, and high-yield bonds to take the greatest advantage of your 401(k)'s tax benefits.

Of course, the investments you choose - and their tax efficiency - will vary based on your own personal situation and goals.

And we'll be with you every step of the way.

In fact, Money Morning's options trading specialist, Tom Gentile, has developed what he calls the "Ultimate Retirement Plan." No matter if you're in retirement or just thinking about it, you could turn a small stake into $162,000, every year, for life.

$2,837 in 7 Days, $4,385 in 10 Days, $5,085 in 10 Days

The fast-cash opportunities Tom Gentile shows people how to make ALWAYS occur within a specific time frame.

The cash kicks out, on average, about every two weeks... and that payday can be big, too, like the $14,980 in potential profits you could have collected over four days just last month.

Best of all, you don't even need to put up a big stake to get in on this action.

Find out how it works right here.

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