Why Young Investors Should Double Down

Aim for the maximum contribution.

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Earlier today, I talked 401(k) investing strategy with John Carl of the Retirement Learning Center. His big tip for 20- and 30-somethings? Invest as much as you can bear: "Double-down your contributions if you can possibly afford it," he says. "If you're younger, focus on accumulating more shares--don't focus on the dollar amount."

Now, he's not talking about only buying stocks (stock funds), but they'll play a big role in how your portfolio will perform when the market bounces back. Simply put, "Right now, shares are on sale, so your $1 buys more shares than a year ago," he says.

So how much should you aim to contribute to your 401(k) to take advantage of market conditions? The max, which is $16,500 for the year. That's over $1,000 a month--a pretty lofty goal for most 20- and 30-somethings I know. "If you can't get to $16,500, get as close as you possibly can," says Carl.

For more on how much to contribute, see Answers to 5 Burning 401(k) Questions.