Ramp up your retirement savings

Putting just a little more into your 401(k) plan can make a big difference in how much you can ultimately save.

Putting just a little more into your 401(k) plan can make a big difference in how much you can ultimately save.

Let's say you contribute an additional 1% of your income -- a modest increase by almost any definition.

If you're making $50,000 a year and get paid twice a month, that's $20 per paycheck.

Although the full $20 will go into your retirement plan, your take-home pay probably won't decline by that much.

Contributions to traditional 401(k) plans are tax-deductible, which means you don't have to pay income taxes on that money until it's withdrawn.

That's one of the things that makes these kinds of retirement plans one of the most valuable tax breaks available to middle-income families, right up there with the ability to deduct the interest on a mortgage.

It also means your take-home pay will only fall 65 cents to 90 cents for every dollar you save, depending on your tax bracket.

But that extra $20 per paycheck can add $49,000 to your retirement savings over a 30-year career, if the investments in your 401(k) earn a good, but not spectacular, average return of 7% a year.

If your employer matches all or part of that contribution, you'll be even further ahead.

You'd have an extra $74,500 if that 1% increase on your part leads to your company boosting its contribution to your 401(k) account by 0.5% of your income.

See just how much you could benefit from boosting your contribution with our 401(k) calculator.

Our 7 rules for a successful 401(k) can help you make all the right decisions about everything from which mutual fund to invest in to why your employer's stock should never be in your retirement plan.

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