No, there is no minimum you have to contribute to your traditional 401(k) plan, but to maximize your retirement account potential, there are suggested amounts that should be contributed. There is also a maximum that you are allowed to contribute to your retirement account. The maximum amount is based on certain criteria.

Focusing on the minimums first: according to Forbes, some experts state you should have one time your income socked away in a 401(k) by the time you are 35. Ten years later, when you turn 45, you should have three times your annual income saved. For example, if you make $50,000 a year at 35, you should have $50,000 saved and $150,000 saved by 45. Other financial experts are more realistic, advising that workers should invest between 6% and 10% of their monthly income. If you make $2,000 a month, you should save between $120 and $200 a month. For many people, this is more realistic and doable. As a general rule, saving a little is better than saving nothing at all, but you should strive to save as much as you can while still meeting your daily financial obligations.

If you have the income to save vigorously, then there are maximum contributions you will need to consider. For workers under the age of 50, you can save up to $18,000 in 2017. If you are over the age of 50, you can invest an additional $6,000 in catch-up payments for a total of $24,000 annually. This equates to roughly $1,500 a month for those under 50, and $2,000 per month for those 50 and over.

There are definite advantages to saving as much as possible in a traditional 401(k). One advantage is that by investing the funds you will have less of a tax burden at the end of the year, since 401(k) investments are done on pre-tax income. This means you will have less income to be taxed, which will decrease the amount of taxes you owe. However, it is important to remember that your 401(k) investments will be taxed when you withdraw them, so you might want to keep that in mind when determining how much you want to invest.

A Roth IRA operates a bit differently than a traditional 401(k) fund. Instead of your investment dollars going into the fund pre-tax, they are invested post-tax. You invest your income after its taxed. This might mean you have less you can afford to invest, but when it's time to start living off the funds, all the money in the account is yours since it was already taxed. Whichever approach you choose, investing in your retirement is always a good thing.

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