8 Tips to MAXIMIZE Your 401(k) for Retirement ..

Pensions are pretty much a thing of the past. With the switch to company-based 401(k) plans, the burden of saving for retirement falls to you.

"The Leave It to Beaver idea of a worker spending 40 years with a company and retiring with a pension and a watch went out with black-and-white television," says Sen. Ron Wyden D-Ore., chairman of the Senate Finance Committee, who held hearings on the retirement crisis last month.

So it's vital for you to be engaged in your company-sponsored 401(k) plan. Financial planners have some common tips to help you get more out of those plans. For instance:

•Contribute at least enough to your 401(k) to meet the employer match. Otherwise, you're giving up free money.

•Early withdrawals (before 59½ in most cases) can result is significant taxes and penalties.

•If you're 50 or older, take advantage of the "catch-up" provision, which lets you put an additional $5,500 into your plan each year (on top of the $17,500 annual max)

By now, most people have heard those. So, here are a few financial tips you may not have thought about, but will help maximize the value of your 401(k) by the time you retire.

1.The 1% rule. "One of the things we encourage people to do is increase (your contribution) by 1% each year," says Larry Rosenthal, of Rosenthal Wealth Management in Manassas, Va. "Each year, up it by 1% till they reach the maximum. You can work that into a savings each year. It slowly puts more money each year without hurting the budget."

2. Save that bonus. If you get a bonus, max out your 401(k) withholding for that month and live off the bonus," says Andrew Rafal, founder of Strategy Financial Group in Phoenix. "If you get a $5,000 bonus, normally, you'd live off your salary, and you'd save 10%, or $500. I want you to withhold 100%, put it in the 401(k) and live off the bonus for that month."

3. If you delay retirement, keep your 401(k). "I work with a lot of retirees, and those getting close to retirement," says Rafal. "If you are 70½, you have to withdraw a certain amount. But if you are still working at 70½ and you have a company 401(k), you do not need to take out that minimum distribution until you actually retire. We often see the wrong advice — roll that into an IRA. Then that individual would have to take out the minimum distribution."

Read the last 5 Tips HERE.

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