Yes, especially if you start saving in your early work years. With compound interest, contributing just 1% more of pay (e.g., $400 on a $40,000 income) annually can provide tens of thousands of dollars more for retirement. Below are some specific examples of investment growth from saving just 1% more of your salary:
* Worker age 35 with $40,000 annual income: Saving 1% more of salary per year will grow to $74,240 by age 65.
* Worker age 45 with $50,000 annual income: Saving 1% more of salary per year will grow to $33,003 by age 65.
Note that younger workers (those who have more time to invest) and those at higher salary levels (those who are saving 1% of a higher number) stand to accumulate the most by saving an extra 1% of their salary. The examples given above were taken from the 401(k) Booster Calculator by Advantage Publications and assume an 8% average annual return on investments and 4% average annual pay increases.
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