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Doubling Down On Your 401(k)

Most of us set up automatic deductions for our 401(k)s and forget about them. That’s what we’re told to do. But Cramer doesn’t recommend that strategy.

There’s nothing wrong with regular contributions to your retirement account. When the market presents an opportunity, though, you should contribute more, he said.

Market corrections happen often throughout our lifetime, and investors usually ride them out, thinking only of the long term. But when stocks are trading at a discount – when the market’s dropped 10%, Cramer said – double your 401(k) contribution for the month.

By the way, we’re talking about a low-cost S&P 500 index fund here. Maybe an actively managed fund if you can find one with consistent performance.

Such a move will earn you more money that if you’d just invested passively the whole time. Granted, the returns won’t be seen immediately. But over time – 40 or 50 years – you could take home tens of thousands of dollars more than you would have.

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  • Jim Cramer

    Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

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