By Nathan Goodwin
Was your New Year’s resolution to save more? If so you’re probably not alone. While it can be hard to do, even a small amount can have a huge impact on your nest egg down the road. For example, consider the impact of investing an extra $50 per month. Assuming an average rate of return of 7% in a tax deferred account, this can amount to an additional $26,000 over a twenty year period, and almost $61,000 over a thirty year period. Bump that monthly contribution up by $100 and you could see an additional $52,000 after twenty years, or $122,000 over thirty years under the same scenario. So, don’t be discouraged by the amount, dollars today can mean thousands down the road.
Think you’re already maxing out? You might not be anymore. While Traditional and Roth contribution limits didn’t change for 2015, most other retirement plans such as 401(k), 403(b), SIMPLE IRA and SIMPLE 401(k) did have increases. Participants under age fifty can contribute an additional $500. Those age fifty and older get an additional $1,000.