Maximize Your 401(k) on the Space Coast

If you’ve ever wondered “what is a 401(k) plan?” or “am I doing this right?”, this guide breaks it down into a plan you can follow.

First: a 90‑second 401(k) refresher

A 401(k) is your company’s retirement plan:

You put part of your paycheck in. Then, if your company offers a match, your employer provides it —free money.

Traditional 401(k):

You get a tax break now. You’ll pay taxes when you withdraw later.

Roth 401(k):

You pay taxes now. Qualified withdrawals can be tax‑free later.

Vesting:

Some or all of the employer match becomes yours over time. Leave too early and you may forfeit the unvested portion.

Fees:

Every fund has an expense ratio (ongoing cost). Lower is usually better.

Why this matters on the Space Coast

Launch windows, contractor rotations, new missions—life moves fast. That’s great for your career, but it’s easy to miss a vesting milestone, forget an old account, or let a default contribution sit too low for too long. The fix: automate the right things and review once a year.

Your 5‑Step Plan

Step 1: Decide how much to contribute

  • Baseline: Contribute enough to get 100% of the employer match.
  • Better: March toward ~15% of pay (you + employer). Turn on auto‑increase 1% each year.

What “getting the match” looks like:

Assume $70,000 salary, 3% raises, 6% long‑term return, and an employer match of 50% on the first 6% of pay.

  • Contribute 3% (employer adds 1.5%) → about $348,200 after 30 years.
  • Contribute 6% (employer adds 3%) → about $696,400 after 30 years.
    That’s roughly $348,200 more just by capturing the full match.

Paycheck reality check (bi‑weekly): On $70,000 salary in Florida

  • 3% = $80.77 pre‑tax per paycheck. If you’re in the 22% federal bracket, your paycheck falls by ~$63 after tax, while $121 goes into your 401(k) ($80.77 you + $40.38 employer).
  • You’re basically turning $63 of take‑home into $121 invested, every paycheck.

Step 2: Pick your tax type (Traditional vs. Roth)

Traditional 401(k) Roth 401(k) Blend both
Lowers taxable income today.  Withdrawals are taxed later. This is helpful if you’re currently in a high tax bracket and expect to be in a lower one in retirement. You pay tax now.  Qualified withdrawals can be tax-free later. With no Florida state income tax, many Space Coast workers, especially early-career, like Roth for its simplicity and potential tax-free growth. You don’t have to choose all-or-nothing.

 

Step 3: Choose your investments (keep it simple and cheap)

Target-Date Fund (TDF) DIY Index Mix Active Funds
One-and-done fund that becomes more conservative as you approach retirement. Check the expense ratio and pick the year closest to when you’ll retire (not your birth year). Use broad, low-cost index funds (e.g., U.S. stocks + international stocks + bonds). Set a calendar reminder to rebalance once a year. Only if you enjoy tracking managers and accept higher fees and performance swings.

Two terms you’ll see:

  • Expense ratio = annual fee baked into a fund. Lower is usually better.
  • Rebalance = nudge back to your target mix so a hot market doesn’t quietly crank up your risk.

Step 4: Review once a year (or after big life changes)

Good times to check: new job, raise, marriage, house, baby. In 15 minutes, you can:

  • Confirm you’re still capturing the full match.
  • Rebalance to your target mix.
  • Check fund costs and your plan’s admin fees.
  • Revisit Roth vs. Traditional based on your tax situation.

Step 5: Changing jobs? Use this quick playbook

  • Leave it in the old 401(k): May keep low institutional pricing; one more login to track.
  • Roll to your new 401(k): Consolidates accounts; stays under ERISA protections; quality depends on the new plan’s fees/funds.
  • Roll to an IRA: Big fund menu and flexibility; different creditor protections and RMD rules to learn.

Golden rule: do a direct (trustee‑to‑trustee) rollover. If they mail you a check and you miss the 60‑day window, taxes and penalties can bite.

Vesting watch: Some matches vest over time. Leaving early can forfeit part of it. Check your plan’s SPD before you move.

Contribution limits (confirm each year)

  • 2026 employee limit: $24,500
  • Catch‑up (50+): $8,000
  • Special catch‑up (age 60–63): $11,250

Employers don’t always adopt every optional feature on day one. So, check your plan.

Quick Comparisons

1) Investment approach

Option Why it works When it’s not ideal What to check
Target‑Date Fund (TDF) “Set it and forget it.” Automatically shifts to a safer mix as you age. If you want precise control of the stock/bond mix. Expense ratio (aim low), glide‑path risk near retirement.
DIY Index Mix Lowest fees, transparent, easy to rebalance annually. If you won’t rebalance or prefer one fund. Keep a written target mix; rebalance once a year.
Active Funds Potential to outperform in some periods. Higher fees, monitoring required, may lag the market. Fees, long‑term track record vs. low‑cost index.

2) Contribute less vs. capture the full match (paycheck math on $70,000, bi‑weekly, 22% federal bracket)

Scenario Your pre‑tax per paycheck After‑tax paycheck drop Employer adds Total invested
3% (under‑funding) $80.77 ~$63.00 $40.38 $121.15
6% (full match)
 $161.54 ~$126.00 $80.77 $242.31

Capturing the full match doubles what gets invested, with a smaller‑than‑double impact on your take‑home pay.

3) Rollover choices when you change jobs

Choice

Pros

Cons

Good fit for…
Leave in old 401(k) Keep institutional fees/funds. Another login; old plan rules. Happy with line‑up and costs.
Roll to new 401(k) Consolidates ERISA protection. Depends on the new plan’s costs/funds. You want one account.
Roll to IRA Huge fund menu; flexible. Different protections/RMD rules. You want maximum control.

Start Your 401(k) Plan Now vs. Wait: a real‑world example

Scenario A — Start now at 6%:
Same assumptions as earlier ($70,000 salary, 3% raises, 6% return, 50% match on first 6%).

After 30 years of steady saving: ≈ $696,400.

Scenario B — Wait 3 years, then start 6%:
You delay contributions for 3 years, then save the same 6% with the same match.

After 30 years: ≈ $596,900.

Cost of waiting 3 years: ≈ $99,500 less at the end.

That’s the quiet power of compounding plus missed employer dollars.

Not ready for 6% today? Start at 3% now and auto‑increase 1%/year until you hit 10%. Over 30 years, that simple habit can leave you with about $66,000 more than waiting 3 years to start at 6% and then auto‑increasing, even though the “starter” amount is smaller.

Starting matters.

FAQ

What is a 401(k) again?
A workplace plan to invest part of your paycheck with tax advantages. Many employers kick in a match—free money tied to your contribution.
How much should I contribute?
At minimum: enough to get the full match.
Over time: build to ~15% of pay (you + employer) and let auto‑increase do the heavy lifting.
Where do I find my fees?
Your plan’s annual participant fee disclosure (often called 404a‑5) and your quarterly statements list fund expense ratios and plan/admin fees.
I’m switching jobs. What do I do first?
Ask both plans for a direct rollover workflow. Compare fees/fund lineups before you move anything. Don’t miss vesting dates.
What’s a typical match around here?
Many large plans land near ~4–5% of pay in total match value (often 50% on the first 6%). Capture all of it.

Next Step

To make sure you’re maximizing your 401(k) benefits on the Space Coast (Brevard County FL), book a 401(k) Tune‑Up with Thoughtful Advisors (fiduciary, CFP® Practictioner‑led).

We’ll:

  • Confirm you’re getting the full match and set auto‑increase.
  • Choose Roth vs. Traditional for your situation.
  • Pick a low‑cost fund lineup and set an annual rebalance reminder.
  • Map a direct rollover plan if you’re changing jobs.

If you’re searching for a “401(k) advisor near me,” this tune‑up makes it easy to compare options and implement an employee retirement savings strategy that fits your goals.
Reach out to Thoughtful Advisors today for a 401(k) plan Space Coast employees can depend on.

Schedule your free 401(k) consultation

Disclaimer: This guide is educational, not tax or investment advice. Confirm current IRS limits and your plan’s rules before making decisions.