How Much Should I Contribute to My 401(k)?

Experts generally recommend contributing 10% to 15% of your pretax income to your 401(k), but at minimum, you should contribute enough to receive your full employer match. The exact amount depends on your age, income, employer match, and retirement goals. The IRS sets annual contribution limits, which are $24,500 for 2026, with catch-up contributions for those 50 and older.

Start with the employer match

Many employers offer matching contributions, which are essentially free money. A common match formula is 100% of your contributions up to 3% of your salary, plus 50% of your contributions on the next 2%. To get the full match, you would need to contribute at least 5% of your salary. For example, if you earn $60,000 annually, contributing 5% ($3,000) would earn you a $2,400 employer match, according to Yahoo Finance. Not contributing enough to get the full match is leaving money on the table.

General contribution guidelines

Beyond the match, aim to save 10% to 15% of your income for retirement, including any employer contributions. This guideline is supported by Fidelity and other financial experts. If you start saving in your 20s, a 6% contribution rate is a good starting point, with annual increases of 1% until you reach the maximum. If you start later, in your 40s or 50s, you may need to contribute 15% or more to catch up.

IRS contribution limits for 2026

The IRS sets annual limits on 401(k) contributions. For 2026, the elective deferral limit is $24,500, up from $23,500 in 2025. If you are 50 or older, you can make catch-up contributions of $8,000 in 2026, bringing your total to $32,500. Additionally, savers aged 60 to 63 may be eligible for a super catch-up contribution of $11,250, for a total of $35,750, if their plan allows it. These limits are adjusted annually for inflation. See the IRS website for details. For related context, see our guide to Roth 401(k) vs. Roth IRA: Key Differences Explained.

Factors that influence your contribution rate

Several factors affect how much you should contribute:

• Age and timeline: The earlier you start, the more time your money has to grow. Starting in your 20s allows a lower contribution rate, while starting later requires a higher rate.
• Income and budget: Your contribution rate is a percentage of your gross pay. If your budget is tight, start with a small amount and increase it over time.
• Employer match: Always aim to get the full match, as it's an immediate return on your contribution.
• Other retirement savings: Consider your overall retirement picture, including IRAs and Social Security.

How to increase your contributions over time

If you can't contribute 15% now, start with what you can afford and increase gradually. Many plans offer an auto-escalation feature that automatically increases your contribution rate annually, often by 1%. You can also manually increase your contribution when you receive a raise or bonus. Even small increases can make a significant difference over time due to compound growth.

Monitoring your 401(k) progress

Regularly review your 401(k) to ensure you're on track. Check your account balance at least annually and compare it to benchmarks. For example, by age 30, you should have saved about one times your annual salary; by age 40, three times; by age 50, six times; by age 60, eight times; and by age 67, ten times. These benchmarks are general guidelines and may vary based on your situation. Also, review your investment allocation and fees, and consider consulting a financial professional for personalized advice.