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Strategy could goose portfolio substantially: Cramer

(This video was first made available Aug. 23, 2013. Click to go to a searchable transcript of this Mad Money segment)

Jim Cramer says there's a simple way to give your bottom line a hefty boost and he laments that too few investors know about it.

At strategic times, the "Mad Money" host wants you to double down on your 401(k) investments. That's it.

"That may not sound like it would make a whole lot of difference in the long run, but it does."

Here's how Cramer's strategy works:

First, Cramer says don't contribute the same amount to your 401(k) every month. "For most people a 401(k) contribution is automatic, the same amount of money is taken right out of your paycheck month after month. They're just investing passively," Cramer said.

That, Cramer said, is a mistake.

Adam Jeffery | CNBC

"Why would you contribute the same amount every single month, when stock prices can differ radically from one month to the next? Would you really want to invest the same amount of money when the market's nearing a top as you would when it's nearing a bottom? No, absolutely not."

Instead, the "Mad Money" host wants you to determine a total sum that you put into your 401(k) for the year and then he wants you to make those contributions strategically.

Specifically, Cramer says when the market declines 10 percent or more, double down on your contribution.

"Whenever you get a 10 percent decline in the S&P 500, what some people in the profession would call a correction, you want to double down. That month you put in twice your normal 401(k) contribution, meaning one sixth of what you planned to invest in your 401(k) over the course of the entire year, instead of one twelfth you'd usually invest."

Cramer believes something as simple as that can really make a difference, and over the course of a lifetime, the additional return can be enormous.

"Will this make a huge difference over the course of four or five years? Probably not. But over forty or fifty years it could mean tens or even hundreds of thousands of extra dollars."

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And in case you're wondering about dollar amounts, Cramer thinks you should only ever contribute as much money to your 401k as it takes to get the full match from your employer.

"After that all of your retirement savings should go into an Individual Retirement Account, which has much lower fees and much more flexibility. If your 401(k) has no employer match, then just start by contributing to your IRA, and keep going until you max it out at $5,500 a year, or $6,500 if you're over fifty," he said.

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