I walked to work today. Granted, the weather was nice and it was only about a mile and a half, so it wasn’t any major accomplishment. But for someone whose physical exercise over the past decade has mostly consisted of lifting the TV remote, it was a significant improvement from my routine.

So, you might be wondering what inspired me to forgo the comfort of my car and put on my walking shoes.

It was my wife.

She’s been nagging me for months about taking better care of myself… and getting progressively meaner about it. The final blow that got me off my lazy butt was her comment that she was going to have a great time spending my life insurance money with her new cabana boy husband once I dropped dead and left her a widow.

Ouch.

Well, today I’m going to take a page out my wife’s playbook. I’m going to ruthlessly nag you, though thankfully not about exercise.

Listen to me: You need to max out your 401(k) plan.

Did you get that? You NEED to max out your 401(k) plan!

Social Security may not be around in another 20 years, or if it is, it will likely be available only to low-income seniors. And if you’re like most Americans, you probably don’t have access to a traditional pension plan. Frankly, even if you do, there’s no guarantee that yours will pay what was promised if your company falls on hard times.

So, you’re on your own. If you want anything better than life in a trailer park with ramen noodles for dinner, then you had best get to saving. And the best way to do that is via automatic investment into your 401(k) plan.

I know, I know. Saving is hard, and you have bills to pay today. All of that might be true. But if you don’t start taking your 401(k) plan seriously, you’re not going to have enough money to retire, and you’re going to end up having to move in with your kids in your old age.

That’s a sobering thought. Not quite as sobering as thinking about your newly widowed wife blowing through your life savings with her new cabana boy husband, but sobering nonetheless. I don’t know about you, but I would be humiliated by having to look to my kids for financial support in retirement.

So, let’s talk through this…

You can defer $18,000 of your salary per year into your company 401(k) plan, and that’s not including any company matching. If you’re 50 or older, you can contribute an additional $6,000. That gives you $24,000 in total per year. And again, that doesn’t include any employer matching. Depending on your salary and your employer’s generosity, matching can chip in several thousand more.

Most American workers take home 26 paychecks over the course of the year. So maxing out at $18,000 per year would put you at $643 per paycheck. That might sound like a lot of money, but it’s actually less than you think due to the tax benefits. If you’re in the 28% bracket, it actually equates to about $462 in take-home pay. That’s still not chump change, of course. But with a little discipline, you can squeeze it into your budget.

And if you can’t… well, it’s time to make some changes.

If you rent, consider getting a cheaper apartment or even taking on a roommate. If you own your house, consider firing your lawn crew and your housekeepers. Yes, your home and garden might not look quite as nice if you’re mowing your own grass and sweeping your own floors. But isn’t it better to tolerate a little dust and retire well than to have an immaculate house and be forced to eat cat food in your golden years because your savings ran out?

I’m not saying you have to live like a pauper until you retire. But you should make maxing out your 401(k) plan a very high priority. The longer you wait to take your savings seriously, the more likely you’ll end up going to your own children with hat in hand.

Charles Lewis Sizemore, CFA, is chief investment officer of the investment firm Sizemore Capital Management and the author of the Sizemore Insights blog. As of this writing, he was long AAPL and MSFT. To read more of his work, CLICK HERE NOW.

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