Motley Fool Hidden Gems Investing Maximizing Your 401(k), and Is Retirement Bad for Your Brain?
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May 9, 2026 Practical tips for making the most of your employer-sponsored retirement plan, from matching rules to mega backdoor Roth strategies. Market updates on strong small-cap and international stock returns. A study linking early retirement to faster cognitive decline is discussed. U.S. debt topping 100% of GDP is also covered.
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Use Raises To Boost Your Savings Rate
- Increase your savings rate when you get raises instead of inflating lifestyle; use the 'spend twice your years to retirement' rule.
- Example: retiring in 15 years, spend 30% of a raise and save 70% to accelerate retirement readiness.
Don't Max Out Early Unless Matches Are True-Upped
- Front-load contributions for longer market exposure but avoid maxing out early if it causes you to miss per-paycheck employer matches.
- Check if your plan offers a year-end true-up; if not, pace contributions to capture every match.
Build A Mega Backdoor Roth When Available
- Use after-tax contributions and in-plan or post-employment conversions to create a mega backdoor Roth if your plan permits.
- In 2026 total limit is $72,000; convert segregated after-tax principal to a Roth IRA tax-free on rollover.