3. Automate your contribution increases
As your last to-do, find the auto-escalation feature in your 401(k) and turn it on. This will raise your contribute rate annually according to the date and the increase you select. Time the escalation to align with the month you expect your annual raise.
Don’t be scared to raise your contribution rate by 1% every year. Assuming you earn an average-sized annual raise of 3%, you can absorb a 1% higher contribution rate. That annual increase should add many thousands of dollars to your retirement account over 20 or 30 years.
Check in now and then
Once you set your starting contribution rate, select a TDF that matches your retirement timeline, and initiate annual contribution increases, your 401(k) essentially runs itself. There’s not much else for you to do, other than check in occasionally. You’ll want to see how your contributions are growing and confirm that your TDF is still working for you.
That’s also a great time to pat yourself on the back for a job well done. Sometimes the hardest part of retirement saving is turning on the wealth-building machine and letting it run.