There’s some good news during the coronavirus pandemic: A recent survey by Schwab indicates the average amount 401(k) plan participants contributed to their accounts this year is up 20% compared with last year.Â
Investing more for retirement is always smart. And those Americans who increased account contributions during the coronavirus-driven market crash made an especially prudent choice since market downturns often present buying opportunities.
But this good news is tempered by the fact that putting more money into a 401(k) isn’t necessarily always the best way to save more for retirement. For some Americans, there are far better choices.Â
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Why extra 401(k) contributions aren’t necessarily the right move
For employees offered a workplace 401(k) with an employer match, contributing at least enough to secure company-provided funds is the smartest course of action. Employer 401(k) contributions are free money to live on in retirement.Â
But once you’ve