Should young working adults double the amount of money invested in 401K?
Why isn't everyone doing this?
Saving more for retirement is never really a bad idea but there are a few things that you will want to consider.
The power of compounding is amazing as I am sure you are aware. The more money you put in, and the longer it has to grow, the more likely your money will grow along with its earnings and its earnings earnings.
You just want to make sure that any money you are putting into your 401k is money that you WILL NOT use until retirement. The reason for this is that any money you pull out you will pay taxes on and typically before age 59.5 you will pay a penalty. For some people this total tax bill can be almost half of what they withdraw depending on their income tax bracket. While it seems like a good idea to put all of your savings into a 401k you need to look a few years ahead. Is there any reason why you may want to pull the money out (house, car, education, etc)? If so, you are better off putting the money into a non-retirement account such as a savings account or individual mutual fund.
Definitely put as much as you can into the account but also realize that you will not be using this money for a LONG time.
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