2. Contribute To Your 401(k) Up To The Match

Now that you've built up an emergency fund, it might be time to start investing.

Your employer may offer a 401(k) program (or, if you happen to work for the government or a non-profit, a 403(b)). They may also offer a match, usually something like 3% or 4% of your annual salary. If this is the case, your next savings goal is to contribute to your 401(k) up to your employer's match.

This is a great investment. Suppose your annual salary is $100,000 and your employer offers a 4% match. If you contribute $4,000 pre-tax, you'll have maximized your match and have $8,000 in your 401(k). If you don't, you'll miss the match and the money will be taxed; depending on your deductions, you'll probably end up with something like $3,000.

By contributing, you've turned $3,000 into $8,000, an immediate 267% return. You'll eventually be taxed on that when you withdraw it after retirement, but that's still awfully good.

Because of this exceptional immediate return, you should prioritize hitting your match before paying down debt, even fairly high-interest credit card debt.

Some companies have 401(k) matching plans that aren't based on employee salaries. Google, for example, will match dollar-to-dollar up to $6,000, and additionally match an extra 50 cents for every dollar you contribute over $12,000. In this case, contributing the IRS maximum of $18,500 yields a match of $9,250. If you have a plan like this, I'd strongly suggest maximizing your contribution.

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