Rashaad Bilal Urges 7%-15% 401(k) Savings Rate Over 1%-3% Defaults

2 articles · Updated · 24/7 Wall St. · May 27

Bilal said his wife’s 401(k) outgrew his largely because she saved a higher share of pay, leading him to argue contribution rate matters more than job title, benefits or fund selection.
At a $60,000 salary, saving 3% puts away $1,800 a year versus $7,200 at 12%; over 30 years at 7% returns, that gap compounds to about $176,000 versus $705,000.
employer matching makes the shortfall even costlier: a worker contributing 3% in a plan matching 100% up to 5% forfeits $1,200 a year, or $12,000 over a decade before market gains.
Bilal’s practical advice is to check the percentage election in the 401(k) portal, raise it at least to the full-match threshold, then increase it by 1 point with each raise until reaching roughly 7% to 12%.

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