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Raw Queries and Responses

1. Shard Calculation

Query:

Response:

Calculated Shard: 148 (from laksa029)

2. Crawled Status Check

Query:

curl -X POST \
  'http://laksa148.int.ahrefs:8124/' \
  -H 'Content-Type: text/plain' \
  -H 'X-ClickHouse-Database: crawler3' \
  -H 'Authorization: Basic YXBpOg==' \
  -d 'SELECT getAhrefsURLFromUnparsed(src_unparsed) AS found_url, ifNull(toUnixTimestamp(download_stamp), 0) AS crawl_time, ifNull(toUnixTimestamp(props_url_first_seen), 0) AS first_indexed_time, download_http_code AS http_code, src_unparsed AS src_unparsed, src_root_hash AS src_root_hash, history_drop_reason AS history_drop_reason, meta_title AS meta_title, meta_descriptions AS meta_descriptions, attrs_boilerpipe_text AS attrs_boilerpipe_text, attrs_markdown AS attrs_markdown, attrs_readable_markdown AS attrs_readable_markdown, meta_canonical AS meta_canonical FROM crawler3.page_info_local FINAL PREWHERE (src_root_hash, src_unparsed) IN ((getAhrefsRootHashFromUnparsed(getAhrefsUnparsedNoserviceFromURL(\'https://www.investopedia.com/articles/retirement/082716/your-401k-whats-ideal-contribution.asp\')), getAhrefsUnparsedNoserviceFromURL(\'https://www.investopedia.com/articles/retirement/082716/your-401k-whats-ideal-contribution.asp\'))) FORMAT JSONEachRow'

Response:

{"found_url":"https:\/\/www.investopedia.com\/articles\/retirement\/082716\/your-401k-whats-ideal-contribution.asp","crawl_time":1776124271,"first_indexed_time":1511353300,"http_code":200,"src_unparsed":"com,investopedia!www,\/articles\/retirement\/082716\/your-401k-whats-ideal-contribution.asp s443","src_root_hash":"7273739457760125548","history_drop_reason":null,"meta_title":"How Much Should I Contribute to My 401(k)?","meta_descriptions":["How much should you contribute to your 401(k)? Start with enough to secure an employer-matching contribution."],"attrs_boilerpipe_text":"If you have a 401(k) plan, it's prudent to contribute enough from each paycheck to take advantage of your employer's match. Beyond that, age,\n401(k) retirement plans\n, and expenses determine how much individuals\ncan contribute\n.\nKey Takeaways\nExperts advise individuals to save enough to get their company's matching contribution.\nMany investors save between 10% to 20% of their gross salary.\nIndividuals can also put additional retirement in a traditional or Roth IRA.\nGet personalized, AI-powered answers built on 27+ years of trusted expertise.\nEmployer Match\nIf your company offers a 401(k)\nmatching contribution\n, you should save at least enough to get the maximum amount. A typical match may mean a dollar-for-dollar match on the first 3% and then 50 cents on the dollar on the next 2%. An employer match is considered an additional benefit of your job, like health insurance or vacation days.\n1\nEmployers may require \"\nvesting\n,\" which requires you to stay at your job for a time to\nkeep the full match\n. For example, employees might be entitled to 100% of the employer match if they've stayed 3 years, but none if they leave before then. \nAim for 15%\nAccording to Fidelity, investors should aim to save 15% of their pre-tax income annually, including any match.\n1\nA common rule of thumb is to set aside\nat least 10% of your gross earnings\n. Those who save early in their careers benefit from the power of\ncompounding\n, which happens when you earn returns on top of earlier profits.\nFor example, if an employee at age 25 puts $2,000 into the market every year for eight years at an average annual return of 8% will have $125,000 by age 55. An employee who waits to begin until age 33 would have to invest almost three times as much to acquire the same amount by age 55.\n2\nWarning\nEmployees may not be eligible for a full employer match if they are\nhighly compensated employees (HCE)\n, own more than 5% of a company, or if their compensation exceeds a set IRS threshold. In 2025 and 2026, employees are HCEs if they make at least $160,000.\n3\n4\n1\nUse Your Age As a Guide\nHow much you can save in a 401(k) will depend on your income and life circumstances. Investment firms such as Fidelity often recommend an every-10-years model, where you aim to have a certain number of years of income saved every 10 years:\n5\nSave your\nannual starting salary by age 30\nSave three times your salary by age 40\nSave six times your salary by age 50\nSave eight times your salary by age 60\nSave 10 times your salary by age 67\nThese numbers aren't exclusive to your 401(k) and include other accounts such as a\nRoth IRA\n. Figures also assume that you began investing early enough to take advantage of compound interest and have other savings available in wealth-generating accounts such as stocks or\nmutual funds\n.\nContribution Limits\nEmployees need to know the\nannual contribution limits\nset by the\nInternal Revenue Service (IRS)\n. These limits apply to employee contributions only. Employer-matching is not factored into these limits.\nThe contribution limit for employees under 50 who participate in a 401(k) plan is $23,500 in 2025, increasing to $24,500 in 2026. If you're 50 or older, you can also make additional\ncatch-up contributions\nof up to $7,500 in 2025 and $8,000 in 2026. Under a change in SECURE 2.0, a higher catch-up contribution limit of $11,250 applies in 2025 and 2026 for employees aged 60, 61, 62, and 63.\n4\n6\nThese contribution limits apply to other plans, such as\n403(b)\n, most\n457\nplans, and the federal government's\nThrift Savings Plan\n.\n6\nAdditional IRA Savings\nFor those who want to go even further, there are several options for other retirement accounts. A popular choice is a\ntraditional IRA or a Roth IRA\n. An IRA is a retirement plan that anyone can set up and contribute to, unlike a 401(k).\nFor a traditional IRA, you contribute\npretax\ndollars, so you are not taxed the year you earn that money. Instead, you are taxed when you make withdrawals, typically in retirement. The contributions reduce the amount of income you pay taxes on. It will also\nreduce adjusted gross income (AGI) calculations\n. A Roth IRA is funded with after-tax dollars, so you pay taxes when you earn, not when you withdraw it.\n7\nThe limit on IRA contributions for tax years 2025 is $7,000 and $8,000 in 2026. Roth IRAs also have income limits based on your tax status. Single filers cannot have a modified adjusted gross income (MAGI) of more than $165,000 in 2025 and $168,000 in 2026 to contribute to a Roth IRA. For a\nmarried couple filing jointly\n, the MAGI limit is $246,000 in 2025 and $252,000 in 2026.\n6\n8\nWhat Is the Minimum Percentage I Should Contribute to My 401(k) Per Paycheck?\nAim to contribute enough from each paycheck to get your employer-match. If your employer offers a 3% match, contribute at least 3% of each paycheck to your 401(k).\nWhen Should I Start Contributing to a 401(k)?\nThe money you contribute to a 401(k) in your 20s will have the longest time to grow and earn compound interest. For 2025, an individual can contribute $23,500 for workers under 50, increasing to $24,500 in 2026.\n8\n6\nWhat Is the 4% Rule?\nThe 4% rule suggests that a retiree should be able to withdraw 4% of the balance in their retirement account in the first year after retiring, and then withdraw the same dollar amount, adjusted for \ninflation\n, every year. Consider the rule of thumb that during retirement, you'll be able to live a lifestyle that is 80% the cost of your current lifestyle. Take your current annual expenses and use the 4% rule to estimate how large a nest egg you'll need.\nThe Bottom Line\nThere are many variables to consider when thinking about retirement. Are you married? Is your spouse employed? How much can you expect from a\npension\nor\nSocial Security benefits\n? And what will your retirement look like? An average savings of 15% of your salary is a good base to contribute toward your retirement fund. At a minimum, you should contribute enough to secure a company match.","attrs_markdown":"\n\n[Skip to content](https:\/\/www.investopedia.com\/articles\/retirement\/082716\/your-401k-whats-ideal-contribution.asp#main)\n\n[Investopedia](https:\/\/www.investopedia.com\/)\n\n[Trade](https:\/\/www.investopedia.com\/simulator\/?inv_to_sim=global_nav)\n\n- Please fill out this field.\n- [Newsletters](https:\/\/www.investopedia.com\/articles\/retirement\/082716\/your-401k-whats-ideal-contribution.asp)\n\nPlease fill out this field.\n\n- [News](https:\/\/www.investopedia.com\/news-4427706)\n  News\n  \n  - [Markets](https:\/\/www.investopedia.com\/markets-news-4427704)\n  - [Companies](https:\/\/www.investopedia.com\/company-news-4427705)\n  - [Earnings](https:\/\/www.investopedia.com\/earnings-reports-5218419)\n  - [CD Rates](https:\/\/www.investopedia.com\/certificates-deposit-news-7111770)\n  - [Mortgage Rates](https:\/\/www.investopedia.com\/mortgage-rates-5184598)\n  - [Economy](https:\/\/www.investopedia.com\/economic-news-5218422)\n  - 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[Retirement](https:\/\/www.investopedia.com\/retirement-planning-4689695)\n  - [View All](https:\/\/www.investopedia.com\/personal-finance-4427760)\n- [Economy](https:\/\/www.investopedia.com\/economy-4689801)\n  - [Government and Policy](https:\/\/www.investopedia.com\/government-and-policy-4689793)\n  - [Monetary Policy](https:\/\/www.investopedia.com\/monetary-policy-4689792)\n  - [Fiscal Policy](https:\/\/www.investopedia.com\/fiscal-policy-4689796)\n  - [Economics](https:\/\/www.investopedia.com\/economics-4689800)\n  - [View All](https:\/\/www.investopedia.com\/economy-4689801)\n- [Reviews](https:\/\/www.investopedia.com\/financial-product-reviews-7110783)\n  - [Best Online Brokers](https:\/\/www.investopedia.com\/best-online-brokers-4587872)\n  - [Best Crypto Exchanges](https:\/\/www.investopedia.com\/best-crypto-exchanges-5071855)\n  - [Best Savings Rates](https:\/\/www.investopedia.com\/high-yield-savings-accounts-4770633)\n  - [Best CD Rates](https:\/\/www.investopedia.com\/best-cd-rates-4770214)\n  - [Best Life Insurance](https:\/\/www.investopedia.com\/the-best-life-insurance-companies-8763666)\n  - [Best Mortgage Rates](https:\/\/www.investopedia.com\/mortgage-rates-5094943)\n  - [Best Robo-Advisors](https:\/\/www.investopedia.com\/the-best-robo-advisors-8764849)\n  - [Best Personal Loans](https:\/\/www.investopedia.com\/the-best-personal-loans-8761582)\n  - [Best Debt Relief Companies](https:\/\/www.investopedia.com\/the-best-debt-relief-companies-8763179)\n  - [View All](https:\/\/www.investopedia.com\/financial-product-reviews-7110783)\n\nTable of Contents\n\nExpand\n\nTable of Contents\n\n- [Employer Match](https:\/\/www.investopedia.com\/articles\/retirement\/082716\/your-401k-whats-ideal-contribution.asp#toc-employer-match)\n- [Aim for 15%](https:\/\/www.investopedia.com\/articles\/retirement\/082716\/your-401k-whats-ideal-contribution.asp#toc-aim-for-15)\n- [Use Your Age As a Guide](https:\/\/www.investopedia.com\/articles\/retirement\/082716\/your-401k-whats-ideal-contribution.asp#toc-use-your-age-as-a-guide)\n- [Contribution Limits](https:\/\/www.investopedia.com\/articles\/retirement\/082716\/your-401k-whats-ideal-contribution.asp#toc-contribution-limits)\n- [Additional IRA Savings](https:\/\/www.investopedia.com\/articles\/retirement\/082716\/your-401k-whats-ideal-contribution.asp#toc-additional-ira-savings)\n- [FAQs](https:\/\/www.investopedia.com\/articles\/retirement\/082716\/your-401k-whats-ideal-contribution.asp#toc-what-is-the-minimum-percentage-i-should-contribute-to-my-401k-per-paycheck)\n- [The Bottom Line](https:\/\/www.investopedia.com\/articles\/retirement\/082716\/your-401k-whats-ideal-contribution.asp#toc-the-bottom-line)\n\n# How Much Should I Contribute to My 401(k)?\nAt minimum, experts say, try to get your employer match\n\nBy\n\n[Jeanette Beebe](https:\/\/www.investopedia.com\/jeanette-beebe-8604231)\n\n![Jeanette Beebe]()\n\n![Jeanette Beebe](https:\/\/www.investopedia.com\/thmb\/fOe_ZOCfhXcY3bVkvZryxVR7czg=\/200x200\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/JeanetteBeebeNewYork-4da31b692f74449daef1f136611e670a.png)\n\n[Full Bio](https:\/\/www.investopedia.com\/jeanette-beebe-8604231)\n\nJeanette Beebe is an experienced journalist, fact-checker, and audio producer covering personal finance, retirement, science, business, medicine, technology, and the arts. Her reporting has appeared in Investopedia, Time Health, Scientific American, Popular Science, AARP, Fast Company, and elsewhere.\n\nLearn about our  [editorial policies](https:\/\/www.investopedia.com\/legal-4768893#editorial-policy)\n\nUpdated November 15, 2025\n\nReviewed by\n\n[David Kindness](https:\/\/www.investopedia.com\/david-kindness-4799933)\n\n![David Kindness]()\n\n![David Kindness](https:\/\/www.investopedia.com\/thmb\/b4nIEkyeNBpifKx8ZXToLtW7fWQ=\/200x200\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/david-kindness-cpa-headshot1-beab5f883dec4a11af658fd86cb9009c.jpg)\n\nReviewed by David Kindness\n\n[Full Bio](https:\/\/www.investopedia.com\/david-kindness-4799933)\n\nDavid Kindness is a Certified Public Accountant (CPA) and an expert in the fields of financial accounting, corporate and individual tax planning and preparation, and investing and retirement planning. David has helped thousands of clients improve their accounting and financial systems, create budgets, and minimize their taxes.\n\nLearn about our  [Financial Review Board](https:\/\/www.investopedia.com\/investopedia-financial-review-board-5076269)\n\nFact checked by\n\n[Vikki Velasquez](https:\/\/www.investopedia.com\/vikki-velasquez-5198872)\n\n![Vikkie Velasquez]()\n\n![Vikkie Velasquez](https:\/\/www.investopedia.com\/thmb\/qsiqwN4603qvBBcEmwBBFAZ7h-8=\/200x200\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/vikki-velasquez-investopedia-portrait-1-18b989d75f1f4d6d9b5b3a47cb3ffc5f.jpg)\n\nFact checked by Vikki Velasquez\n\n[Full Bio](https:\/\/www.investopedia.com\/vikki-velasquez-5198872)\n\nVikki Velasquez is a researcher and writer who has managed, coordinated, and directed various community and nonprofit organizations. She has conducted in-depth research on social and economic issues and has also revised and edited educational materials for the Greater Richmond area.\n\nLearn about our  [editorial policies](https:\/\/www.investopedia.com\/legal-4768893#editorial-policy)\n\nPart of the Series\n\n401(k) Plans: The Complete Guide\n\n[401(k) Plans: What Are They, How They Work](https:\/\/www.investopedia.com\/terms\/1\/401kplan.asp)\n\nWhat Is It?\n\n1. [Beginner's Guide to 401(k) Types](https:\/\/www.investopedia.com\/beginners-guide-to-types-of-401-k-s-5323549)\n2. [The Rules of a 401(k) Retirement Plan](https:\/\/www.investopedia.com\/articles\/retirement\/08\/401k-info.asp)\n3. [Is a 401(k) Worth It?](https:\/\/www.investopedia.com\/articles\/retirement\/11\/6-problems-with-401k-plans.asp)\n4. [Are 401(k)s FDIC-Insured?](https:\/\/www.investopedia.com\/ask\/answers\/090115\/why-my-401k-not-fdicinsured.asp)\n5. [401(k) Age Limits: Can You Be Too Young for One?](https:\/\/www.investopedia.com\/401k-age-limits-too-young-5323754)\n\n401(k)s at Work\n\n1. [How Much Should I Contribute to My 401(k)?](https:\/\/www.investopedia.com\/articles\/retirement\/082716\/your-401k-whats-ideal-contribution.asp)\n   CURRENT ARTICLE\n2. [401(k) Contribution Limits](https:\/\/www.investopedia.com\/retirement\/401k-contribution-limits\/)\n3. [How 401(k) Matching Works](https:\/\/www.investopedia.com\/articles\/personal-finance\/112315\/how-401k-matching-works.asp)\n4. [What Is a Good 401(k) Match? How It Works and What's the Average](https:\/\/www.investopedia.com\/articles\/personal-finance\/120315\/what-good-401k-match.asp)\n5. [Vesting: What It Is and How It Works](https:\/\/www.investopedia.com\/terms\/v\/vesting.asp)\n6. [My Employer Doesn't Offer a 401(k). Should I Care?](https:\/\/www.investopedia.com\/articles\/personal-finance\/101415\/my-employer-doesnt-offer-401k-should-i-care.asp)\n\nWhen Changing Jobs\n\n1. [When You Leave Your Job](https:\/\/www.investopedia.com\/articles\/personal-finance\/112315\/what-happens-401k-after-you-leave-your-job.asp)\n2. [Why Might Your 401(k) Be Unavailable After You Leave a Job](https:\/\/www.investopedia.com\/articles\/investing\/092216\/why-would-your-401k-be-unavailable-after-your-leave-job.asp)\n3. [How to Transfer a 401(k) to a New Employer](https:\/\/www.investopedia.com\/articles\/personal-finance\/092415\/guide-rollover-401k-new-employer.asp)\n\nTips and Tricks\n\n1. [401(k) or IRA: Get Both](https:\/\/www.investopedia.com\/ask\/answers\/07\/401\$k\$_ira.asp)\n2. [Top 7 Reasons to Roll Over Your 401(k) to an IRA](https:\/\/www.investopedia.com\/articles\/personal-finance\/071715\/8-reasons-roll-over-your-401k-ira.asp)\n3. [Are Contributions Tax Deductible?](https:\/\/www.investopedia.com\/ask\/answers\/112515\/are-401k-contributions-tax-deductible.asp)\n4. [Can My 401(k) be Garnished or Seized?](https:\/\/www.investopedia.com\/ask\/answers\/090915\/can-my-401k-be-seized-or-garnished.asp)\n5. [What Your 401(k) Could Look Like in the Next 20 Years](https:\/\/www.investopedia.com\/articles\/personal-finance\/120115\/what-your-401k-can-look-next-20-years.asp)\n\n![Office worker with tablet](https:\/\/www.investopedia.com\/thmb\/U1pt85QjHR9DplE7IuJAe3ntFK4=\/1500x0\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/GettyImages-2167008479-8901e4ef689d42bdbe89659891b913f3.jpg)\n\n![Office worker with tablet](https:\/\/www.investopedia.com\/thmb\/U1pt85QjHR9DplE7IuJAe3ntFK4=\/1500x0\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/GettyImages-2167008479-8901e4ef689d42bdbe89659891b913f3.jpg)\n\nnd3000 \/ Getty Images\n\nClose\n\nIf you have a 401(k) plan, it's prudent to contribute enough from each paycheck to take advantage of your employer's match. Beyond that, age, [401(k) retirement plans](https:\/\/www.investopedia.com\/terms\/1\/401kplan.asp), and expenses determine how much individuals [can contribute](https:\/\/www.investopedia.com\/articles\/personal-finance\/082615\/maxing-out-your-401k-profitable-heres-why.asp).\n\n### Key Takeaways\n- Experts advise individuals to save enough to get their company's matching contribution.\n- Many investors save between 10% to 20% of their gross salary.\n- Individuals can also put additional retirement in a traditional or Roth IRA.\n\nGet personalized, AI-powered answers built on 27+ years of trusted expertise.\n\nASK\n## Employer Match\nIf your company offers a 401(k) [matching contribution](https:\/\/www.investopedia.com\/terms\/m\/matchingcontribution.asp), you should save at least enough to get the maximum amount. A typical match may mean a dollar-for-dollar match on the first 3% and then 50 cents on the dollar on the next 2%. An employer match is considered an additional benefit of your job, like health insurance or vacation days.1\n\nEmployers may require \"[vesting](https:\/\/www.investopedia.com\/terms\/v\/vesting.asp),\" which requires you to stay at your job for a time to [keep the full match](https:\/\/www.investopedia.com\/is-your-401-k-employer-match-too-good-to-be-true-what-the-fine-print-could-reveal-11763235). For example, employees might be entitled to 100% of the employer match if they've stayed 3 years, but none if they leave before then.\n\n### Fast Fact\nThere are also [solo 401(k)s](https:\/\/www.investopedia.com\/ask\/answers\/100314\/do-i-need-employer-set-401k-plan.asp) for [self-employed](https:\/\/www.investopedia.com\/terms\/s\/self-employed.asp) people.\n## Aim for 15%\nAccording to Fidelity, investors should aim to save 15% of their pre-tax income annually, including any match.1 A common rule of thumb is to set aside [at least 10% of your gross earnings](https:\/\/www.investopedia.com\/ask\/answers\/100314\/there-minimum-i-have-contribute-my-401k-plan.asp). Those who save early in their careers benefit from the power of [compounding](https:\/\/www.investopedia.com\/terms\/c\/compounding.asp), which happens when you earn returns on top of earlier profits.\n\nTake the Next Step to Invest\n\nAdvertiser Disclosure\n\n×\n\nThe offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.\n\nFor example, if an employee at age 25 puts \\$2,000 into the market every year for eight years at an average annual return of 8% will have \\$125,000 by age 55. An employee who waits to begin until age 33 would have to invest almost three times as much to acquire the same amount by age 55.2\n\n### Warning\nEmployees may not be eligible for a full employer match if they are [highly compensated employees (HCE)](https:\/\/www.investopedia.com\/terms\/h\/highly-compensated-employee.asp), own more than 5% of a company, or if their compensation exceeds a set IRS threshold. In 2025 and 2026, employees are HCEs if they make at least \\$160,000.341\n## Use Your Age As a Guide\nHow much you can save in a 401(k) will depend on your income and life circumstances. Investment firms such as Fidelity often recommend an every-10-years model, where you aim to have a certain number of years of income saved every 10 years:5\n\n- Save your [annual starting salary by age 30](https:\/\/www.investopedia.com\/contributing-to-401-k-in-20s-11764698)\n- Save three times your salary by age 40\n- Save six times your salary by age 50\n- Save eight times your salary by age 60\n- Save 10 times your salary by age 67\n\nThese numbers aren't exclusive to your 401(k) and include other accounts such as a [Roth IRA](https:\/\/www.investopedia.com\/terms\/r\/rothira.asp). Figures also assume that you began investing early enough to take advantage of compound interest and have other savings available in wealth-generating accounts such as stocks or [mutual funds](https:\/\/www.investopedia.com\/terms\/m\/mutualfund.asp).\n\n## Contribution Limits\nEmployees need to know the [annual contribution limits](https:\/\/www.investopedia.com\/should-max-out-401k-early-5324697) set by the [Internal Revenue Service (IRS)](https:\/\/www.investopedia.com\/terms\/i\/irs.asp). These limits apply to employee contributions only. Employer-matching is not factored into these limits.\n\nThe contribution limit for employees under 50 who participate in a 401(k) plan is \\$23,500 in 2025, increasing to \\$24,500 in 2026. If you're 50 or older, you can also make additional [catch-up contributions](https:\/\/www.investopedia.com\/terms\/c\/catchupcontribution.asp) of up to \\$7,500 in 2025 and \\$8,000 in 2026. Under a change in SECURE 2.0, a higher catch-up contribution limit of \\$11,250 applies in 2025 and 2026 for employees aged 60, 61, 62, and 63.46\n\nThese contribution limits apply to other plans, such as [403(b)](https:\/\/www.investopedia.com\/terms\/1\/403bplan.asp), most [457](https:\/\/www.investopedia.com\/terms\/1\/457plan.asp) plans, and the federal government's [Thrift Savings Plan](https:\/\/www.investopedia.com\/terms\/t\/thrift_savings_plan.asp).6\n\n## Additional IRA Savings\nFor those who want to go even further, there are several options for other retirement accounts. A popular choice is a [traditional IRA or a Roth IRA](https:\/\/www.investopedia.com\/retirement\/roth-vs-traditional-ira-which-is-right-for-you\/). An IRA is a retirement plan that anyone can set up and contribute to, unlike a 401(k).\n\nFor a traditional IRA, you contribute [pretax](https:\/\/www.investopedia.com\/terms\/p\/pretaxcontribution.asp) dollars, so you are not taxed the year you earn that money. Instead, you are taxed when you make withdrawals, typically in retirement. The contributions reduce the amount of income you pay taxes on. It will also [reduce adjusted gross income (AGI) calculations](https:\/\/www.investopedia.com\/ask\/answers\/111815\/do-401k-contributions-reduce-agi-andor-magi.asp). A Roth IRA is funded with after-tax dollars, so you pay taxes when you earn, not when you withdraw it.7\n\nThe limit on IRA contributions for tax years 2025 is \\$7,000 and \\$8,000 in 2026. Roth IRAs also have income limits based on your tax status. Single filers cannot have a modified adjusted gross income (MAGI) of more than \\$165,000 in 2025 and \\$168,000 in 2026 to contribute to a Roth IRA. For a [married couple filing jointly](https:\/\/www.investopedia.com\/terms\/m\/mfj.asp), the MAGI limit is \\$246,000 in 2025 and \\$252,000 in 2026.68\n\n### Tip\nSee Investopedia's picks for [Best Roth IRA Accounts](https:\/\/www.investopedia.com\/the-best-roth-ira-brokers-8764132).\n\n## What Is the Minimum Percentage I Should Contribute to My 401(k) Per Paycheck?\nAim to contribute enough from each paycheck to get your employer-match. If your employer offers a 3% match, contribute at least 3% of each paycheck to your 401(k).\n\n## When Should I Start Contributing to a 401(k)?\nThe money you contribute to a 401(k) in your 20s will have the longest time to grow and earn compound interest. For 2025, an individual can contribute \\$23,500 for workers under 50, increasing to \\$24,500 in 2026.86\n\n## What Is the 4% Rule?\nThe 4% rule suggests that a retiree should be able to withdraw 4% of the balance in their retirement account in the first year after retiring, and then withdraw the same dollar amount, adjusted for [inflation](https:\/\/www.investopedia.com\/terms\/i\/inflation.asp), every year. Consider the rule of thumb that during retirement, you'll be able to live a lifestyle that is 80% the cost of your current lifestyle. Take your current annual expenses and use the 4% rule to estimate how large a nest egg you'll need.\n## The Bottom Line\nThere are many variables to consider when thinking about retirement. Are you married? Is your spouse employed? How much can you expect from a [pension](https:\/\/www.investopedia.com\/terms\/p\/pensionplan.asp) or [Social Security benefits](https:\/\/www.investopedia.com\/terms\/s\/social-security-benefits.asp)? And what will your retirement look like? An average savings of 15% of your salary is a good base to contribute toward your retirement fund. At a minimum, you should contribute enough to secure a company match.\n\nGet personalized, AI-powered answers built on 27+ years of trusted expertise.\n\n- [How many savers miss employer 401(k) matching contributions?](https:\/\/www.investopedia.com\/articles\/retirement\/082716\/your-401k-whats-ideal-contribution.asp)\n- [What is the average employer 401(k) match percentage?](https:\/\/www.investopedia.com\/articles\/retirement\/082716\/your-401k-whats-ideal-contribution.asp)\n- [What percentage of private industry workers participate in retirement plans?](https:\/\/www.investopedia.com\/articles\/retirement\/082716\/your-401k-whats-ideal-contribution.asp)\n\nASK\n\nArticle Sources\n\nInvestopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our [editorial policy.](https:\/\/www.investopedia.com\/legal-4768893#EditorialPolicy)\n\n1. Fidelity. \"[How Does a 401(k) Match Work?](https:\/\/www.fidelity.com\/learning-center\/smart-money\/average-401k-match#:~:text=Key%20takeaways&text=Match%20formulas%20vary%2C%20but%20a,each%20year%2C%20including%20any%20match.)\"\n2. Charles Schwab. \"[Young Investors: 401(k) Savings and Compound Interest](https:\/\/www.schwab.com\/learn\/story\/young-investors-401k-savings-and-compound-interest#:~:text=Compound%20returns%2C%20or%20compounding%2C%20happens,work%20for%20you%2C%20the%20better.).\"\n3. Internal Revenue Service. “[2025 Amounts Relating to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living, Notice 2024-80](https:\/\/www.irs.gov\/pub\/irs-drop\/n-24-80.pdf).” Page 2.\n4. Internal Revenue Service. \"[2026 Amounts Relating to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living: Notice 2025-67](https:\/\/www.irs.gov\/pub\/irs-drop\/n-25-67.pdf).\"\n5. Fidelity. \"[How Much Do I Need to Retire?](https:\/\/www.fidelity.com\/viewpoints\/retirement\/how-much-do-i-need-to-retire)\"\n6. Internal Revenue Service. \"[401(k) Limit Increases to \\$23,500 for 2025, IRA Limit Remains \\$7,000](https:\/\/www.irs.gov\/newsroom\/401k-limit-increases-to-23500-for-2025-ira-limit-remains-7000).\"\n7. Internal Revenue Service. \"[Traditional and Roth IRAs](https:\/\/www.irs.gov\/retirement-plans\/traditional-and-roth-iras).\"\n8. Internal Revenue Service. \"[401(k) limit increases to \\$24,500 for 2026, IRA limit increases to \\$7,500](https:\/\/www.irs.gov\/newsroom\/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500).\"\n\nCompare Accounts\n\nAdvertiser Disclosure\n\n×\n\nThe offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.\n\nPart of the Series\n\n401(k) Plans: The Complete Guide\n\n[401(k) Plans: What Are They, How They Work](https:\/\/www.investopedia.com\/terms\/1\/401kplan.asp)\n\nWhat Is It?\n\n1. [Beginner's Guide to 401(k) Types](https:\/\/www.investopedia.com\/beginners-guide-to-types-of-401-k-s-5323549)\n2. [The Rules of a 401(k) Retirement Plan](https:\/\/www.investopedia.com\/articles\/retirement\/08\/401k-info.asp)\n3. [Is a 401(k) Worth It?](https:\/\/www.investopedia.com\/articles\/retirement\/11\/6-problems-with-401k-plans.asp)\n4. [Are 401(k)s FDIC-Insured?](https:\/\/www.investopedia.com\/ask\/answers\/090115\/why-my-401k-not-fdicinsured.asp)\n5. [401(k) Age Limits: Can You Be Too Young for One?](https:\/\/www.investopedia.com\/401k-age-limits-too-young-5323754)\n\n401(k)s at Work\n\n1. [How Much Should I Contribute to My 401(k)?](https:\/\/www.investopedia.com\/articles\/retirement\/082716\/your-401k-whats-ideal-contribution.asp)\n   CURRENT ARTICLE\n2. [401(k) Contribution Limits](https:\/\/www.investopedia.com\/retirement\/401k-contribution-limits\/)\n3. [How 401(k) Matching Works](https:\/\/www.investopedia.com\/articles\/personal-finance\/112315\/how-401k-matching-works.asp)\n4. [What Is a Good 401(k) Match? How It Works and What's the Average](https:\/\/www.investopedia.com\/articles\/personal-finance\/120315\/what-good-401k-match.asp)\n5. [Vesting: What It Is and How It Works](https:\/\/www.investopedia.com\/terms\/v\/vesting.asp)\n6. [My Employer Doesn't Offer a 401(k). Should I Care?](https:\/\/www.investopedia.com\/articles\/personal-finance\/101415\/my-employer-doesnt-offer-401k-should-i-care.asp)\n\nWhen Changing Jobs\n\n1. [When You Leave Your Job](https:\/\/www.investopedia.com\/articles\/personal-finance\/112315\/what-happens-401k-after-you-leave-your-job.asp)\n2. [Why Might Your 401(k) Be Unavailable After You Leave a Job](https:\/\/www.investopedia.com\/articles\/investing\/092216\/why-would-your-401k-be-unavailable-after-your-leave-job.asp)\n3. [How to Transfer a 401(k) to a New Employer](https:\/\/www.investopedia.com\/articles\/personal-finance\/092415\/guide-rollover-401k-new-employer.asp)\n\nTips and Tricks\n\n1. [401(k) or IRA: Get Both](https:\/\/www.investopedia.com\/ask\/answers\/07\/401\$k\$_ira.asp)\n2. [Top 7 Reasons to Roll Over Your 401(k) to an IRA](https:\/\/www.investopedia.com\/articles\/personal-finance\/071715\/8-reasons-roll-over-your-401k-ira.asp)\n3. [Are Contributions Tax Deductible?](https:\/\/www.investopedia.com\/ask\/answers\/112515\/are-401k-contributions-tax-deductible.asp)\n4. [Can My 401(k) be Garnished or Seized?](https:\/\/www.investopedia.com\/ask\/answers\/090915\/can-my-401k-be-seized-or-garnished.asp)\n5. [What Your 401(k) Could Look Like in the Next 20 Years](https:\/\/www.investopedia.com\/articles\/personal-finance\/120115\/what-your-401k-can-look-next-20-years.asp)\n\nRead more\n\n- [Personal Finance](https:\/\/www.investopedia.com\/personal-finance-4427760)\n- [Retirement Planning](https:\/\/www.investopedia.com\/retirement-planning-4689695)\n- [401(k)](https:\/\/www.investopedia.com\/401k-4689694)\n\nPartner Links\n\n## Related Articles\n[![Woman with red hair looking on screen of her mobile phone.](https:\/\/www.investopedia.com\/thmb\/JAxLbgbAO8TbsHz-FMXDnfbqBQc=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/GettyImages-1383931877-ae415c867f404f819766e53fce4e3473.jpg) ![Woman with red hair looking on screen of her mobile phone.](https:\/\/www.investopedia.com\/thmb\/JAxLbgbAO8TbsHz-FMXDnfbqBQc=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/GettyImages-1383931877-ae415c867f404f819766e53fce4e3473.jpg) Roll Over Your 401(k) to an IRA: 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Explained](https:\/\/www.investopedia.com\/articles\/retirement\/08\/borrow-from-401k-loan.asp)\n\n[![A group of colleagues in an office one giving a highfive while others applaud](https:\/\/www.investopedia.com\/thmb\/v-OB7sIpM38B4l2PmUKg5pRbd7c=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/GettyImages-2212050734-b1f5e6053f874d3cafc1790a3c047c2b.jpg) ![A group of colleagues in an office one giving a highfive while others applaud](https:\/\/www.investopedia.com\/thmb\/v-OB7sIpM38B4l2PmUKg5pRbd7c=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/GettyImages-2212050734-b1f5e6053f874d3cafc1790a3c047c2b.jpg) 14% of Workers Hit This 401(k) Benchmark—Learn How To Reach This Goal](https:\/\/www.investopedia.com\/14-of-workers-hit-this-401-k-benchmark-learn-how-to-reach-this-goal-11947165)\n\n[![Business people negotiating a contract](https:\/\/www.investopedia.com\/thmb\/_Qvqoyjik4VLMPVy4h9T4BaR7b0=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/GettyImages-1211622412-89335a9d887449fa9ebc191efaef2405.jpg) ![Business people negotiating a contract](https:\/\/www.investopedia.com\/thmb\/_Qvqoyjik4VLMPVy4h9T4BaR7b0=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/GettyImages-1211622412-89335a9d887449fa9ebc191efaef2405.jpg) Retirement Savings Without a 401(k): Top Alternatives Explored](https:\/\/www.investopedia.com\/articles\/personal-finance\/101415\/my-employer-doesnt-offer-401k-should-i-care.asp)\n\n[![A person seated on a sofa using a laptop surrounded by a cozy interior with bookshelves](https:\/\/www.investopedia.com\/thmb\/BPw2oUvqD5GTZPKGh9K3cOjp7kk=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/401k-damircudic-38bfb514ec88430088c370d5792b1249.jpg) ![A person seated on a sofa using a laptop surrounded by a cozy interior with bookshelves](https:\/\/www.investopedia.com\/thmb\/BPw2oUvqD5GTZPKGh9K3cOjp7kk=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/401k-damircudic-38bfb514ec88430088c370d5792b1249.jpg) Are You Behind on Your 401(k)? Here’s How Much Millennials Have Saved](https:\/\/www.investopedia.com\/are-you-behind-on-your-401-k-here-s-how-much-millennials-have-saved-11941107)\n\n[![woman doing taxes at home](https:\/\/www.investopedia.com\/thmb\/g4C1iHcWAKQt31y1JlZOyv-ICHM=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/GettyImages-1298373292-f055be5e350a48e5adcd8ece5bc571b1.jpg) ![woman doing taxes at home](https:\/\/www.investopedia.com\/thmb\/g4C1iHcWAKQt31y1JlZOyv-ICHM=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/GettyImages-1298373292-f055be5e350a48e5adcd8ece5bc571b1.jpg) 10 Strategies to Lower Taxes on 401(k) Withdrawals](https:\/\/www.investopedia.com\/articles\/personal-finance\/062615\/10-little-known-ways-reduce-your-401k-taxes.asp)\n\n[![A person typing on a laptop at a wooden table in a home setting natural light coming through windows in the background](https:\/\/www.investopedia.com\/thmb\/axwT3eugn32mvLvXzWT0g3X4EPw=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/GettyImages-1380716334-8603ce3056d24ceeb37748903a363321.jpg) ![A person typing on a laptop at a wooden table in a home setting natural light coming through windows in the background](https:\/\/www.investopedia.com\/thmb\/axwT3eugn32mvLvXzWT0g3X4EPw=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/GettyImages-1380716334-8603ce3056d24ceeb37748903a363321.jpg) How the Average 401(k) Withdrawal Rate Could Impact Retirees and Their Financial Future](https:\/\/www.investopedia.com\/how-the-average-401-k-withdrawal-rate-could-impact-retirees-and-their-financial-future-11944125)\n\n[![Interior of a home that looks destroyed. Man kneels with a crowbar in the distance. ](https:\/\/www.investopedia.com\/thmb\/uhFaZHWmjX21x3XHyFY82puAR_c=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/GettyImages-965984216-db5535ed40824b0cb900e606dfd9c997.jpg) ![Interior of a home that looks destroyed. Man kneels with a crowbar in the distance. ](https:\/\/www.investopedia.com\/thmb\/uhFaZHWmjX21x3XHyFY82puAR_c=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/GettyImages-965984216-db5535ed40824b0cb900e606dfd9c997.jpg) 401(k) Hardship Withdrawal: Steps, Eligibility, and Tax Effects](https:\/\/www.investopedia.com\/retirement\/relief-401k-hardship-withdrawals\/)\n\n[![Two mature women shopping at an outdoor food market. ](https:\/\/www.investopedia.com\/thmb\/qNDmFReGXqhJMqJjXo40GV-CyGc=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/GettyImages-1438233969-08b4f322bd6f4c04b75978968d305bd5.jpg) ![Two mature women shopping at an outdoor food market. ](https:\/\/www.investopedia.com\/thmb\/qNDmFReGXqhJMqJjXo40GV-CyGc=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/GettyImages-1438233969-08b4f322bd6f4c04b75978968d305bd5.jpg) 401(k) Retirement Taxes: Traditional vs. Roth Explained](https:\/\/www.investopedia.com\/articles\/personal-finance\/061915\/how-your-401k-taxed-when-you-retire.asp)\n\n[![A woman stands in her kitchen reading a statement](https:\/\/www.investopedia.com\/thmb\/5tFTHPYKZGevnpv61PrvbA5Wg58=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/whathappenstoyour401k-0f021d65ca8b458f95d961790bb41cc0.jpg) ![A woman stands in her kitchen reading a statement](https:\/\/www.investopedia.com\/thmb\/5tFTHPYKZGevnpv61PrvbA5Wg58=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/whathappenstoyour401k-0f021d65ca8b458f95d961790bb41cc0.jpg) Options for Managing Your 401(k) After Leaving Your Job](https:\/\/www.investopedia.com\/articles\/personal-finance\/112315\/what-happens-401k-after-you-leave-your-job.asp)\n\n[![A young investor checks on investments using a phone and a laptop at a kitchen table.](https:\/\/www.investopedia.com\/thmb\/2sDwKsNQsY2l5ZyUCtV5xHWyZDw=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/OscarWong-fcaab38f5d854286a8d0631eae8fe6f5.jpg) ![A young investor checks on investments using a phone and a laptop at a kitchen table.](https:\/\/www.investopedia.com\/thmb\/2sDwKsNQsY2l5ZyUCtV5xHWyZDw=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/OscarWong-fcaab38f5d854286a8d0631eae8fe6f5.jpg) Best Solo 401(k) Companies for April 2026](https:\/\/www.investopedia.com\/the-best-solo-401k-companies-11705501)\n\n[![Three individuals seated at a table engaging in a discussion over a tablet device](https:\/\/www.investopedia.com\/thmb\/fpm_h8ZnGt9ZZ68Nz7hYQ5rQOAs=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/retirementplannews0-1000-ee16d37a8cd2464e97acfe9cba1bcecc.jpg) ![Three individuals seated at a table engaging in a discussion over a tablet device](https:\/\/www.investopedia.com\/thmb\/fpm_h8ZnGt9ZZ68Nz7hYQ5rQOAs=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/retirementplannews0-1000-ee16d37a8cd2464e97acfe9cba1bcecc.jpg) Why Many Are Losing Thousands in Retirement Because of These 401(k) Funds](https:\/\/www.investopedia.com\/why-many-are-losing-thousands-in-retirement-because-of-these-401-k-funds-11932530)\n\n[![Colleagues in an office](https:\/\/www.investopedia.com\/thmb\/Q300vRjqdCHCyi5NS_N6M_C9BwM=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/GettyImages-2103894533-4ed3c4c49a334b2e8e7f31033984a0f7.jpg) ![Colleagues in an office](https:\/\/www.investopedia.com\/thmb\/Q300vRjqdCHCyi5NS_N6M_C9BwM=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/GettyImages-2103894533-4ed3c4c49a334b2e8e7f31033984a0f7.jpg) Roth 401(k) Withdrawal Rules: Key Guidelines](https:\/\/www.investopedia.com\/ask\/answers\/101314\/what-are-roth-401k-withdrawal-rules.asp)\n\n[Investopedia](https:\/\/www.investopedia.com\/)\n\n[Newsletter Sign Up](https:\/\/www.investopedia.com\/articles\/retirement\/082716\/your-401k-whats-ideal-contribution.asp)\n\nFollow Us\n\n- [News](https:\/\/www.investopedia.com\/news-4427706)\n- [Investing](https:\/\/www.investopedia.com\/investing-4427685)\n- [Simulator](https:\/\/www.investopedia.com\/simulator\/?inv_to_sim=global_nav)\n- [Banking](https:\/\/www.investopedia.com\/banking-4427754)\n- [Personal Finance](https:\/\/www.investopedia.com\/personal-finance-4427760)\n- [Economy](https:\/\/www.investopedia.com\/economy-4689801)\n- [Reviews](https:\/\/www.investopedia.com\/financial-product-reviews-7110783)\n- [Dictionary](https:\/\/www.investopedia.com\/financial-term-dictionary-4769738)\n\n- [About Us](https:\/\/www.investopedia.com\/about-us-5093223)\n- [Editorial 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[H](https:\/\/www.investopedia.com\/terms-beginning-with-h-4769358)\n- [I](https:\/\/www.investopedia.com\/terms-beginning-with-i-4769359)\n- [J](https:\/\/www.investopedia.com\/terms-beginning-with-j-4769360)\n- [K](https:\/\/www.investopedia.com\/terms-beginning-with-k-4769361)\n- [L](https:\/\/www.investopedia.com\/terms-beginning-with-l-4769362)\n- [M](https:\/\/www.investopedia.com\/terms-beginning-with-m-4769363)\n- [N](https:\/\/www.investopedia.com\/terms-beginning-with-n-4769364)\n- [O](https:\/\/www.investopedia.com\/terms-beginning-with-o-4769365)\n- [P](https:\/\/www.investopedia.com\/terms-beginning-with-p-4769366)\n- [Q](https:\/\/www.investopedia.com\/terms-beginning-with-q-4769367)\n- [R](https:\/\/www.investopedia.com\/terms-beginning-with-r-4769368)\n- [S](https:\/\/www.investopedia.com\/terms-beginning-with-s-4769369)\n- [T](https:\/\/www.investopedia.com\/terms-beginning-with-t-4769370)\n- [U](https:\/\/www.investopedia.com\/terms-beginning-with-u-4769371)\n- [V](https:\/\/www.investopedia.com\/terms-beginning-with-v-4769372)\n- [W](https:\/\/www.investopedia.com\/terms-beginning-with-w-4769373)\n- [X](https:\/\/www.investopedia.com\/terms-beginning-with-x-4769374)\n- [Y](https:\/\/www.investopedia.com\/terms-beginning-with-y-4769375)\n- [Z](https:\/\/www.investopedia.com\/terms-beginning-with-z-4769376)\n\nInvestopedia is part of the [People Inc.](https:\/\/www.people.inc\/) publishing family.\n\nNewsletter Sign Up\n\nNewsletter Sign Up","attrs_readable_markdown":"If you have a 401(k) plan, it's prudent to contribute enough from each paycheck to take advantage of your employer's match. Beyond that, age, [401(k) retirement plans](https:\/\/www.investopedia.com\/terms\/1\/401kplan.asp), and expenses determine how much individuals [can contribute](https:\/\/www.investopedia.com\/articles\/personal-finance\/082615\/maxing-out-your-401k-profitable-heres-why.asp).\n\n### Key Takeaways\n- Experts advise individuals to save enough to get their company's matching contribution.\n- Many investors save between 10% to 20% of their gross salary.\n- Individuals can also put additional retirement in a traditional or Roth IRA.\n\nGet personalized, AI-powered answers built on 27+ years of trusted expertise.\n## Employer Match\nIf your company offers a 401(k) [matching contribution](https:\/\/www.investopedia.com\/terms\/m\/matchingcontribution.asp), you should save at least enough to get the maximum amount. A typical match may mean a dollar-for-dollar match on the first 3% and then 50 cents on the dollar on the next 2%. An employer match is considered an additional benefit of your job, like health insurance or vacation days.1\n\nEmployers may require \"[vesting](https:\/\/www.investopedia.com\/terms\/v\/vesting.asp),\" which requires you to stay at your job for a time to [keep the full match](https:\/\/www.investopedia.com\/is-your-401-k-employer-match-too-good-to-be-true-what-the-fine-print-could-reveal-11763235). For example, employees might be entitled to 100% of the employer match if they've stayed 3 years, but none if they leave before then.\n\n## Aim for 15%\nAccording to Fidelity, investors should aim to save 15% of their pre-tax income annually, including any match.1 A common rule of thumb is to set aside [at least 10% of your gross earnings](https:\/\/www.investopedia.com\/ask\/answers\/100314\/there-minimum-i-have-contribute-my-401k-plan.asp). Those who save early in their careers benefit from the power of [compounding](https:\/\/www.investopedia.com\/terms\/c\/compounding.asp), which happens when you earn returns on top of earlier profits.\n\nFor example, if an employee at age 25 puts \\$2,000 into the market every year for eight years at an average annual return of 8% will have \\$125,000 by age 55. An employee who waits to begin until age 33 would have to invest almost three times as much to acquire the same amount by age 55.2\n\n### Warning\nEmployees may not be eligible for a full employer match if they are [highly compensated employees (HCE)](https:\/\/www.investopedia.com\/terms\/h\/highly-compensated-employee.asp), own more than 5% of a company, or if their compensation exceeds a set IRS threshold. In 2025 and 2026, employees are HCEs if they make at least \\$160,000.341\n## Use Your Age As a Guide\nHow much you can save in a 401(k) will depend on your income and life circumstances. Investment firms such as Fidelity often recommend an every-10-years model, where you aim to have a certain number of years of income saved every 10 years:5\n\n- Save your [annual starting salary by age 30](https:\/\/www.investopedia.com\/contributing-to-401-k-in-20s-11764698)\n- Save three times your salary by age 40\n- Save six times your salary by age 50\n- Save eight times your salary by age 60\n- Save 10 times your salary by age 67\n\nThese numbers aren't exclusive to your 401(k) and include other accounts such as a [Roth IRA](https:\/\/www.investopedia.com\/terms\/r\/rothira.asp). Figures also assume that you began investing early enough to take advantage of compound interest and have other savings available in wealth-generating accounts such as stocks or [mutual funds](https:\/\/www.investopedia.com\/terms\/m\/mutualfund.asp).\n\n## Contribution Limits\nEmployees need to know the [annual contribution limits](https:\/\/www.investopedia.com\/should-max-out-401k-early-5324697) set by the [Internal Revenue Service (IRS)](https:\/\/www.investopedia.com\/terms\/i\/irs.asp). These limits apply to employee contributions only. Employer-matching is not factored into these limits.\n\nThe contribution limit for employees under 50 who participate in a 401(k) plan is \\$23,500 in 2025, increasing to \\$24,500 in 2026. If you're 50 or older, you can also make additional [catch-up contributions](https:\/\/www.investopedia.com\/terms\/c\/catchupcontribution.asp) of up to \\$7,500 in 2025 and \\$8,000 in 2026. Under a change in SECURE 2.0, a higher catch-up contribution limit of \\$11,250 applies in 2025 and 2026 for employees aged 60, 61, 62, and 63.46\n\nThese contribution limits apply to other plans, such as [403(b)](https:\/\/www.investopedia.com\/terms\/1\/403bplan.asp), most [457](https:\/\/www.investopedia.com\/terms\/1\/457plan.asp) plans, and the federal government's [Thrift Savings Plan](https:\/\/www.investopedia.com\/terms\/t\/thrift_savings_plan.asp).6\n\n## Additional IRA Savings\nFor those who want to go even further, there are several options for other retirement accounts. A popular choice is a [traditional IRA or a Roth IRA](https:\/\/www.investopedia.com\/retirement\/roth-vs-traditional-ira-which-is-right-for-you\/). An IRA is a retirement plan that anyone can set up and contribute to, unlike a 401(k).\n\nFor a traditional IRA, you contribute [pretax](https:\/\/www.investopedia.com\/terms\/p\/pretaxcontribution.asp) dollars, so you are not taxed the year you earn that money. Instead, you are taxed when you make withdrawals, typically in retirement. The contributions reduce the amount of income you pay taxes on. It will also [reduce adjusted gross income (AGI) calculations](https:\/\/www.investopedia.com\/ask\/answers\/111815\/do-401k-contributions-reduce-agi-andor-magi.asp). A Roth IRA is funded with after-tax dollars, so you pay taxes when you earn, not when you withdraw it.7\n\nThe limit on IRA contributions for tax years 2025 is \\$7,000 and \\$8,000 in 2026. Roth IRAs also have income limits based on your tax status. Single filers cannot have a modified adjusted gross income (MAGI) of more than \\$165,000 in 2025 and \\$168,000 in 2026 to contribute to a Roth IRA. For a [married couple filing jointly](https:\/\/www.investopedia.com\/terms\/m\/mfj.asp), the MAGI limit is \\$246,000 in 2025 and \\$252,000 in 2026.68\n\n## What Is the Minimum Percentage I Should Contribute to My 401(k) Per Paycheck?\nAim to contribute enough from each paycheck to get your employer-match. If your employer offers a 3% match, contribute at least 3% of each paycheck to your 401(k).\n\n## When Should I Start Contributing to a 401(k)?\nThe money you contribute to a 401(k) in your 20s will have the longest time to grow and earn compound interest. For 2025, an individual can contribute \\$23,500 for workers under 50, increasing to \\$24,500 in 2026.86\n\n## What Is the 4% Rule?\nThe 4% rule suggests that a retiree should be able to withdraw 4% of the balance in their retirement account in the first year after retiring, and then withdraw the same dollar amount, adjusted for [inflation](https:\/\/www.investopedia.com\/terms\/i\/inflation.asp), every year. Consider the rule of thumb that during retirement, you'll be able to live a lifestyle that is 80% the cost of your current lifestyle. Take your current annual expenses and use the 4% rule to estimate how large a nest egg you'll need.\n## The Bottom Line\nThere are many variables to consider when thinking about retirement. Are you married? Is your spouse employed? How much can you expect from a [pension](https:\/\/www.investopedia.com\/terms\/p\/pensionplan.asp) or [Social Security benefits](https:\/\/www.investopedia.com\/terms\/s\/social-security-benefits.asp)? And what will your retirement look like? An average savings of 15% of your salary is a good base to contribute toward your retirement fund. At a minimum, you should contribute enough to secure a company match.","meta_canonical":null}

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URL	https://www.investopedia.com/articles/retirement/082716/your-401k-whats-ideal-contribution.asp
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Meta Title	How Much Should I Contribute to My 401(k)?
Meta Description	How much should you contribute to your 401(k)? Start with enough to secure an employer-matching contribution.
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Boilerpipe Text	If you have a 401(k) plan, it's prudent to contribute enough from each paycheck to take advantage of your employer's match. Beyond that, age, 401(k) retirement plans , and expenses determine how much individuals can contribute . Key Takeaways Experts advise individuals to save enough to get their company's matching contribution. Many investors save between 10% to 20% of their gross salary. Individuals can also put additional retirement in a traditional or Roth IRA. Get personalized, AI-powered answers built on 27+ years of trusted expertise. Employer Match If your company offers a 401(k) matching contribution , you should save at least enough to get the maximum amount. A typical match may mean a dollar-for-dollar match on the first 3% and then 50 cents on the dollar on the next 2%. An employer match is considered an additional benefit of your job, like health insurance or vacation days. 1 Employers may require " vesting ," which requires you to stay at your job for a time to keep the full match . For example, employees might be entitled to 100% of the employer match if they've stayed 3 years, but none if they leave before then. Aim for 15% According to Fidelity, investors should aim to save 15% of their pre-tax income annually, including any match. 1 A common rule of thumb is to set aside at least 10% of your gross earnings . Those who save early in their careers benefit from the power of compounding , which happens when you earn returns on top of earlier profits. For example, if an employee at age 25 puts $2,000 into the market every year for eight years at an average annual return of 8% will have $125,000 by age 55. An employee who waits to begin until age 33 would have to invest almost three times as much to acquire the same amount by age 55. 2 Warning Employees may not be eligible for a full employer match if they are highly compensated employees (HCE) , own more than 5% of a company, or if their compensation exceeds a set IRS threshold. In 2025 and 2026, employees are HCEs if they make at least $160,000. 3 4 1 Use Your Age As a Guide How much you can save in a 401(k) will depend on your income and life circumstances. Investment firms such as Fidelity often recommend an every-10-years model, where you aim to have a certain number of years of income saved every 10 years: 5 Save your annual starting salary by age 30 Save three times your salary by age 40 Save six times your salary by age 50 Save eight times your salary by age 60 Save 10 times your salary by age 67 These numbers aren't exclusive to your 401(k) and include other accounts such as a Roth IRA . Figures also assume that you began investing early enough to take advantage of compound interest and have other savings available in wealth-generating accounts such as stocks or mutual funds . Contribution Limits Employees need to know the annual contribution limits set by the Internal Revenue Service (IRS) . These limits apply to employee contributions only. Employer-matching is not factored into these limits. The contribution limit for employees under 50 who participate in a 401(k) plan is $23,500 in 2025, increasing to $24,500 in 2026. If you're 50 or older, you can also make additional catch-up contributions of up to $7,500 in 2025 and $8,000 in 2026. Under a change in SECURE 2.0, a higher catch-up contribution limit of $11,250 applies in 2025 and 2026 for employees aged 60, 61, 62, and 63. 4 6 These contribution limits apply to other plans, such as 403(b) , most 457 plans, and the federal government's Thrift Savings Plan . 6 Additional IRA Savings For those who want to go even further, there are several options for other retirement accounts. A popular choice is a traditional IRA or a Roth IRA . An IRA is a retirement plan that anyone can set up and contribute to, unlike a 401(k). For a traditional IRA, you contribute pretax dollars, so you are not taxed the year you earn that money. Instead, you are taxed when you make withdrawals, typically in retirement. The contributions reduce the amount of income you pay taxes on. It will also reduce adjusted gross income (AGI) calculations . A Roth IRA is funded with after-tax dollars, so you pay taxes when you earn, not when you withdraw it. 7 The limit on IRA contributions for tax years 2025 is $7,000 and $8,000 in 2026. Roth IRAs also have income limits based on your tax status. Single filers cannot have a modified adjusted gross income (MAGI) of more than $165,000 in 2025 and $168,000 in 2026 to contribute to a Roth IRA. For a married couple filing jointly , the MAGI limit is $246,000 in 2025 and $252,000 in 2026. 6 8 What Is the Minimum Percentage I Should Contribute to My 401(k) Per Paycheck? Aim to contribute enough from each paycheck to get your employer-match. If your employer offers a 3% match, contribute at least 3% of each paycheck to your 401(k). When Should I Start Contributing to a 401(k)? The money you contribute to a 401(k) in your 20s will have the longest time to grow and earn compound interest. For 2025, an individual can contribute $23,500 for workers under 50, increasing to $24,500 in 2026. 8 6 What Is the 4% Rule? The 4% rule suggests that a retiree should be able to withdraw 4% of the balance in their retirement account in the first year after retiring, and then withdraw the same dollar amount, adjusted for inflation , every year. Consider the rule of thumb that during retirement, you'll be able to live a lifestyle that is 80% the cost of your current lifestyle. Take your current annual expenses and use the 4% rule to estimate how large a nest egg you'll need. The Bottom Line There are many variables to consider when thinking about retirement. Are you married? Is your spouse employed? How much can you expect from a pension or Social Security benefits ? And what will your retirement look like? An average savings of 15% of your salary is a good base to contribute toward your retirement fund. At a minimum, you should contribute enough to secure a company match.
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[Contribution Limits](https://www.investopedia.com/articles/retirement/082716/your-401k-whats-ideal-contribution.asp#toc-contribution-limits) - [Additional IRA Savings](https://www.investopedia.com/articles/retirement/082716/your-401k-whats-ideal-contribution.asp#toc-additional-ira-savings) - [FAQs](https://www.investopedia.com/articles/retirement/082716/your-401k-whats-ideal-contribution.asp#toc-what-is-the-minimum-percentage-i-should-contribute-to-my-401k-per-paycheck) - [The Bottom Line](https://www.investopedia.com/articles/retirement/082716/your-401k-whats-ideal-contribution.asp#toc-the-bottom-line) # How Much Should I Contribute to My 401(k)? At minimum, experts say, try to get your employer match By [Jeanette Beebe](https://www.investopedia.com/jeanette-beebe-8604231) ![Jeanette Beebe]() ![Jeanette Beebe](https://www.investopedia.com/thmb/fOe_ZOCfhXcY3bVkvZryxVR7czg=/200x200/filters:no_upscale:max_bytes$150000$:strip_icc/JeanetteBeebeNewYork-4da31b692f74449daef1f136611e670a.png) [Full Bio](https://www.investopedia.com/jeanette-beebe-8604231) Jeanette Beebe is an experienced journalist, fact-checker, and audio producer covering personal finance, retirement, science, business, medicine, technology, and the arts. Her reporting has appeared in Investopedia, Time Health, Scientific American, Popular Science, AARP, Fast Company, and elsewhere. Learn about our [editorial policies](https://www.investopedia.com/legal-4768893#editorial-policy) Updated November 15, 2025 Reviewed by [David Kindness](https://www.investopedia.com/david-kindness-4799933) ![David Kindness]() ![David Kindness](https://www.investopedia.com/thmb/b4nIEkyeNBpifKx8ZXToLtW7fWQ=/200x200/filters:no_upscale:max_bytes$150000$:strip_icc/david-kindness-cpa-headshot1-beab5f883dec4a11af658fd86cb9009c.jpg) Reviewed by David Kindness [Full Bio](https://www.investopedia.com/david-kindness-4799933) David Kindness is a Certified Public Accountant (CPA) and an expert in the fields of financial accounting, corporate and individual tax planning and preparation, and investing and retirement planning. David has helped thousands of clients improve their accounting and financial systems, create budgets, and minimize their taxes. Learn about our [Financial Review Board](https://www.investopedia.com/investopedia-financial-review-board-5076269) Fact checked by [Vikki Velasquez](https://www.investopedia.com/vikki-velasquez-5198872) ![Vikkie Velasquez]() ![Vikkie Velasquez](https://www.investopedia.com/thmb/qsiqwN4603qvBBcEmwBBFAZ7h-8=/200x200/filters:no_upscale:max_bytes$150000$:strip_icc/vikki-velasquez-investopedia-portrait-1-18b989d75f1f4d6d9b5b3a47cb3ffc5f.jpg) Fact checked by Vikki Velasquez [Full Bio](https://www.investopedia.com/vikki-velasquez-5198872) Vikki Velasquez is a researcher and writer who has managed, coordinated, and directed various community and nonprofit organizations. She has conducted in-depth research on social and economic issues and has also revised and edited educational materials for the Greater Richmond area. Learn about our [editorial policies](https://www.investopedia.com/legal-4768893#editorial-policy) Part of the Series 401(k) Plans: The Complete Guide [401(k) Plans: What Are They, How They Work](https://www.investopedia.com/terms/1/401kplan.asp) What Is It? 1. [Beginner's Guide to 401(k) Types](https://www.investopedia.com/beginners-guide-to-types-of-401-k-s-5323549) 2. [The Rules of a 401(k) Retirement Plan](https://www.investopedia.com/articles/retirement/08/401k-info.asp) 3. [Is a 401(k) Worth It?](https://www.investopedia.com/articles/retirement/11/6-problems-with-401k-plans.asp) 4. [Are 401(k)s FDIC-Insured?](https://www.investopedia.com/ask/answers/090115/why-my-401k-not-fdicinsured.asp) 5. [401(k) Age Limits: Can You Be Too Young for One?](https://www.investopedia.com/401k-age-limits-too-young-5323754) 401(k)s at Work 1. [How Much Should I Contribute to My 401(k)?](https://www.investopedia.com/articles/retirement/082716/your-401k-whats-ideal-contribution.asp) CURRENT ARTICLE 2. [401(k) Contribution Limits](https://www.investopedia.com/retirement/401k-contribution-limits/) 3. [How 401(k) Matching Works](https://www.investopedia.com/articles/personal-finance/112315/how-401k-matching-works.asp) 4. [What Is a Good 401(k) Match? How It Works and What's the Average](https://www.investopedia.com/articles/personal-finance/120315/what-good-401k-match.asp) 5. [Vesting: What It Is and How It Works](https://www.investopedia.com/terms/v/vesting.asp) 6. [My Employer Doesn't Offer a 401(k). Should I Care?](https://www.investopedia.com/articles/personal-finance/101415/my-employer-doesnt-offer-401k-should-i-care.asp) When Changing Jobs 1. [When You Leave Your Job](https://www.investopedia.com/articles/personal-finance/112315/what-happens-401k-after-you-leave-your-job.asp) 2. [Why Might Your 401(k) Be Unavailable After You Leave a Job](https://www.investopedia.com/articles/investing/092216/why-would-your-401k-be-unavailable-after-your-leave-job.asp) 3. [How to Transfer a 401(k) to a New Employer](https://www.investopedia.com/articles/personal-finance/092415/guide-rollover-401k-new-employer.asp) Tips and Tricks 1. [401(k) or IRA: Get Both](https://www.investopedia.com/ask/answers/07/401$k$_ira.asp) 2. [Top 7 Reasons to Roll Over Your 401(k) to an IRA](https://www.investopedia.com/articles/personal-finance/071715/8-reasons-roll-over-your-401k-ira.asp) 3. [Are Contributions Tax Deductible?](https://www.investopedia.com/ask/answers/112515/are-401k-contributions-tax-deductible.asp) 4. [Can My 401(k) be Garnished or Seized?](https://www.investopedia.com/ask/answers/090915/can-my-401k-be-seized-or-garnished.asp) 5. [What Your 401(k) Could Look Like in the Next 20 Years](https://www.investopedia.com/articles/personal-finance/120115/what-your-401k-can-look-next-20-years.asp) ![Office worker with tablet](https://www.investopedia.com/thmb/U1pt85QjHR9DplE7IuJAe3ntFK4=/1500x0/filters:no_upscale:max_bytes$150000$:strip_icc/GettyImages-2167008479-8901e4ef689d42bdbe89659891b913f3.jpg) ![Office worker with tablet](https://www.investopedia.com/thmb/U1pt85QjHR9DplE7IuJAe3ntFK4=/1500x0/filters:no_upscale:max_bytes$150000$:strip_icc/GettyImages-2167008479-8901e4ef689d42bdbe89659891b913f3.jpg) nd3000 / Getty Images Close If you have a 401(k) plan, it's prudent to contribute enough from each paycheck to take advantage of your employer's match. Beyond that, age, [401(k) retirement plans](https://www.investopedia.com/terms/1/401kplan.asp), and expenses determine how much individuals [can contribute](https://www.investopedia.com/articles/personal-finance/082615/maxing-out-your-401k-profitable-heres-why.asp). ### Key Takeaways - Experts advise individuals to save enough to get their company's matching contribution. - Many investors save between 10% to 20% of their gross salary. - Individuals can also put additional retirement in a traditional or Roth IRA. Get personalized, AI-powered answers built on 27+ years of trusted expertise. ASK ## Employer Match If your company offers a 401(k) [matching contribution](https://www.investopedia.com/terms/m/matchingcontribution.asp), you should save at least enough to get the maximum amount. A typical match may mean a dollar-for-dollar match on the first 3% and then 50 cents on the dollar on the next 2%. An employer match is considered an additional benefit of your job, like health insurance or vacation days.1 Employers may require "[vesting](https://www.investopedia.com/terms/v/vesting.asp)," which requires you to stay at your job for a time to [keep the full match](https://www.investopedia.com/is-your-401-k-employer-match-too-good-to-be-true-what-the-fine-print-could-reveal-11763235). For example, employees might be entitled to 100% of the employer match if they've stayed 3 years, but none if they leave before then. ### Fast Fact There are also [solo 401(k)s](https://www.investopedia.com/ask/answers/100314/do-i-need-employer-set-401k-plan.asp) for [self-employed](https://www.investopedia.com/terms/s/self-employed.asp) people. ## Aim for 15% According to Fidelity, investors should aim to save 15% of their pre-tax income annually, including any match.1 A common rule of thumb is to set aside [at least 10% of your gross earnings](https://www.investopedia.com/ask/answers/100314/there-minimum-i-have-contribute-my-401k-plan.asp). Those who save early in their careers benefit from the power of [compounding](https://www.investopedia.com/terms/c/compounding.asp), which happens when you earn returns on top of earlier profits. Take the Next Step to Invest Advertiser Disclosure × The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. For example, if an employee at age 25 puts \$2,000 into the market every year for eight years at an average annual return of 8% will have \$125,000 by age 55. An employee who waits to begin until age 33 would have to invest almost three times as much to acquire the same amount by age 55.2 ### Warning Employees may not be eligible for a full employer match if they are [highly compensated employees (HCE)](https://www.investopedia.com/terms/h/highly-compensated-employee.asp), own more than 5% of a company, or if their compensation exceeds a set IRS threshold. In 2025 and 2026, employees are HCEs if they make at least \$160,000.341 ## Use Your Age As a Guide How much you can save in a 401(k) will depend on your income and life circumstances. Investment firms such as Fidelity often recommend an every-10-years model, where you aim to have a certain number of years of income saved every 10 years:5 - Save your [annual starting salary by age 30](https://www.investopedia.com/contributing-to-401-k-in-20s-11764698) - Save three times your salary by age 40 - Save six times your salary by age 50 - Save eight times your salary by age 60 - Save 10 times your salary by age 67 These numbers aren't exclusive to your 401(k) and include other accounts such as a [Roth IRA](https://www.investopedia.com/terms/r/rothira.asp). Figures also assume that you began investing early enough to take advantage of compound interest and have other savings available in wealth-generating accounts such as stocks or [mutual funds](https://www.investopedia.com/terms/m/mutualfund.asp). ## Contribution Limits Employees need to know the [annual contribution limits](https://www.investopedia.com/should-max-out-401k-early-5324697) set by the [Internal Revenue Service (IRS)](https://www.investopedia.com/terms/i/irs.asp). These limits apply to employee contributions only. Employer-matching is not factored into these limits. The contribution limit for employees under 50 who participate in a 401(k) plan is \$23,500 in 2025, increasing to \$24,500 in 2026. If you're 50 or older, you can also make additional [catch-up contributions](https://www.investopedia.com/terms/c/catchupcontribution.asp) of up to \$7,500 in 2025 and \$8,000 in 2026. Under a change in SECURE 2.0, a higher catch-up contribution limit of \$11,250 applies in 2025 and 2026 for employees aged 60, 61, 62, and 63.46 These contribution limits apply to other plans, such as [403(b)](https://www.investopedia.com/terms/1/403bplan.asp), most [457](https://www.investopedia.com/terms/1/457plan.asp) plans, and the federal government's [Thrift Savings Plan](https://www.investopedia.com/terms/t/thrift_savings_plan.asp).6 ## Additional IRA Savings For those who want to go even further, there are several options for other retirement accounts. A popular choice is a [traditional IRA or a Roth IRA](https://www.investopedia.com/retirement/roth-vs-traditional-ira-which-is-right-for-you/). An IRA is a retirement plan that anyone can set up and contribute to, unlike a 401(k). For a traditional IRA, you contribute [pretax](https://www.investopedia.com/terms/p/pretaxcontribution.asp) dollars, so you are not taxed the year you earn that money. Instead, you are taxed when you make withdrawals, typically in retirement. The contributions reduce the amount of income you pay taxes on. It will also [reduce adjusted gross income (AGI) calculations](https://www.investopedia.com/ask/answers/111815/do-401k-contributions-reduce-agi-andor-magi.asp). A Roth IRA is funded with after-tax dollars, so you pay taxes when you earn, not when you withdraw it.7 The limit on IRA contributions for tax years 2025 is \$7,000 and \$8,000 in 2026. Roth IRAs also have income limits based on your tax status. Single filers cannot have a modified adjusted gross income (MAGI) of more than \$165,000 in 2025 and \$168,000 in 2026 to contribute to a Roth IRA. For a [married couple filing jointly](https://www.investopedia.com/terms/m/mfj.asp), the MAGI limit is \$246,000 in 2025 and \$252,000 in 2026.68 ### Tip See Investopedia's picks for [Best Roth IRA Accounts](https://www.investopedia.com/the-best-roth-ira-brokers-8764132). ## What Is the Minimum Percentage I Should Contribute to My 401(k) Per Paycheck? Aim to contribute enough from each paycheck to get your employer-match. If your employer offers a 3% match, contribute at least 3% of each paycheck to your 401(k). ## When Should I Start Contributing to a 401(k)? The money you contribute to a 401(k) in your 20s will have the longest time to grow and earn compound interest. For 2025, an individual can contribute \$23,500 for workers under 50, increasing to \$24,500 in 2026.86 ## What Is the 4% Rule? The 4% rule suggests that a retiree should be able to withdraw 4% of the balance in their retirement account in the first year after retiring, and then withdraw the same dollar amount, adjusted for [inflation](https://www.investopedia.com/terms/i/inflation.asp), every year. Consider the rule of thumb that during retirement, you'll be able to live a lifestyle that is 80% the cost of your current lifestyle. Take your current annual expenses and use the 4% rule to estimate how large a nest egg you'll need. ## The Bottom Line There are many variables to consider when thinking about retirement. Are you married? Is your spouse employed? How much can you expect from a [pension](https://www.investopedia.com/terms/p/pensionplan.asp) or [Social Security benefits](https://www.investopedia.com/terms/s/social-security-benefits.asp)? And what will your retirement look like? An average savings of 15% of your salary is a good base to contribute toward your retirement fund. At a minimum, you should contribute enough to secure a company match. Get personalized, AI-powered answers built on 27+ years of trusted expertise. - [How many savers miss employer 401(k) matching contributions?](https://www.investopedia.com/articles/retirement/082716/your-401k-whats-ideal-contribution.asp) - [What is the average employer 401(k) match percentage?](https://www.investopedia.com/articles/retirement/082716/your-401k-whats-ideal-contribution.asp) - [What percentage of private industry workers participate in retirement plans?](https://www.investopedia.com/articles/retirement/082716/your-401k-whats-ideal-contribution.asp) ASK Article Sources Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our [editorial policy.](https://www.investopedia.com/legal-4768893#EditorialPolicy) 1. Fidelity. "[How Does a 401(k) Match Work?](https://www.fidelity.com/learning-center/smart-money/average-401k-match#:~:text=Key%20takeaways&text=Match%20formulas%20vary%2C%20but%20a,each%20year%2C%20including%20any%20match.)" 2. Charles Schwab. "[Young Investors: 401(k) Savings and Compound Interest](https://www.schwab.com/learn/story/young-investors-401k-savings-and-compound-interest#:~:text=Compound%20returns%2C%20or%20compounding%2C%20happens,work%20for%20you%2C%20the%20better.)." 3. Internal Revenue Service. “[2025 Amounts Relating to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living, Notice 2024-80](https://www.irs.gov/pub/irs-drop/n-24-80.pdf).” Page 2. 4. Internal Revenue Service. "[2026 Amounts Relating to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living: Notice 2025-67](https://www.irs.gov/pub/irs-drop/n-25-67.pdf)." 5. Fidelity. "[How Much Do I Need to Retire?](https://www.fidelity.com/viewpoints/retirement/how-much-do-i-need-to-retire)" 6. Internal Revenue Service. "[401(k) Limit Increases to \$23,500 for 2025, IRA Limit Remains \$7,000](https://www.irs.gov/newsroom/401k-limit-increases-to-23500-for-2025-ira-limit-remains-7000)." 7. Internal Revenue Service. "[Traditional and Roth IRAs](https://www.irs.gov/retirement-plans/traditional-and-roth-iras)." 8. Internal Revenue Service. "[401(k) limit increases to \$24,500 for 2026, IRA limit increases to \$7,500](https://www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500)." Compare Accounts Advertiser Disclosure × The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. Part of the Series 401(k) Plans: The Complete Guide [401(k) Plans: What Are They, How They Work](https://www.investopedia.com/terms/1/401kplan.asp) What Is It? 1. [Beginner's Guide to 401(k) Types](https://www.investopedia.com/beginners-guide-to-types-of-401-k-s-5323549) 2. [The Rules of a 401(k) Retirement Plan](https://www.investopedia.com/articles/retirement/08/401k-info.asp) 3. [Is a 401(k) Worth It?](https://www.investopedia.com/articles/retirement/11/6-problems-with-401k-plans.asp) 4. [Are 401(k)s FDIC-Insured?](https://www.investopedia.com/ask/answers/090115/why-my-401k-not-fdicinsured.asp) 5. [401(k) Age Limits: Can You Be Too Young for One?](https://www.investopedia.com/401k-age-limits-too-young-5323754) 401(k)s at Work 1. [How Much Should I Contribute to My 401(k)?](https://www.investopedia.com/articles/retirement/082716/your-401k-whats-ideal-contribution.asp) CURRENT ARTICLE 2. [401(k) Contribution Limits](https://www.investopedia.com/retirement/401k-contribution-limits/) 3. [How 401(k) Matching Works](https://www.investopedia.com/articles/personal-finance/112315/how-401k-matching-works.asp) 4. [What Is a Good 401(k) Match? How It Works and What's the Average](https://www.investopedia.com/articles/personal-finance/120315/what-good-401k-match.asp) 5. [Vesting: What It Is and How It Works](https://www.investopedia.com/terms/v/vesting.asp) 6. [My Employer Doesn't Offer a 401(k). Should I Care?](https://www.investopedia.com/articles/personal-finance/101415/my-employer-doesnt-offer-401k-should-i-care.asp) When Changing Jobs 1. [When You Leave Your Job](https://www.investopedia.com/articles/personal-finance/112315/what-happens-401k-after-you-leave-your-job.asp) 2. [Why Might Your 401(k) Be Unavailable After You Leave a Job](https://www.investopedia.com/articles/investing/092216/why-would-your-401k-be-unavailable-after-your-leave-job.asp) 3. [How to Transfer a 401(k) to a New Employer](https://www.investopedia.com/articles/personal-finance/092415/guide-rollover-401k-new-employer.asp) Tips and Tricks 1. [401(k) or IRA: Get Both](https://www.investopedia.com/ask/answers/07/401$k$_ira.asp) 2. [Top 7 Reasons to Roll Over Your 401(k) to an IRA](https://www.investopedia.com/articles/personal-finance/071715/8-reasons-roll-over-your-401k-ira.asp) 3. [Are Contributions Tax Deductible?](https://www.investopedia.com/ask/answers/112515/are-401k-contributions-tax-deductible.asp) 4. [Can My 401(k) be Garnished or Seized?](https://www.investopedia.com/ask/answers/090915/can-my-401k-be-seized-or-garnished.asp) 5. [What Your 401(k) Could Look Like in the Next 20 Years](https://www.investopedia.com/articles/personal-finance/120115/what-your-401k-can-look-next-20-years.asp) Read more - [Personal Finance](https://www.investopedia.com/personal-finance-4427760) - [Retirement Planning](https://www.investopedia.com/retirement-planning-4689695) - [401(k)](https://www.investopedia.com/401k-4689694) Partner Links ## Related Articles [![Woman with red hair looking on screen of her mobile phone.](https://www.investopedia.com/thmb/JAxLbgbAO8TbsHz-FMXDnfbqBQc=/282x188/filters:no_upscale:max_bytes$150000$:strip_icc/GettyImages-1383931877-ae415c867f404f819766e53fce4e3473.jpg) ![Woman with red hair looking on screen of her mobile phone.](https://www.investopedia.com/thmb/JAxLbgbAO8TbsHz-FMXDnfbqBQc=/282x188/filters:no_upscale:max_bytes$150000$:strip_icc/GettyImages-1383931877-ae415c867f404f819766e53fce4e3473.jpg) Roll Over Your 401(k) to an IRA: Benefits and How-To 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Readable Markdown	If you have a 401(k) plan, it's prudent to contribute enough from each paycheck to take advantage of your employer's match. Beyond that, age, [401(k) retirement plans](https://www.investopedia.com/terms/1/401kplan.asp), and expenses determine how much individuals [can contribute](https://www.investopedia.com/articles/personal-finance/082615/maxing-out-your-401k-profitable-heres-why.asp). ### Key Takeaways - Experts advise individuals to save enough to get their company's matching contribution. - Many investors save between 10% to 20% of their gross salary. - Individuals can also put additional retirement in a traditional or Roth IRA. Get personalized, AI-powered answers built on 27+ years of trusted expertise. ## Employer Match If your company offers a 401(k) [matching contribution](https://www.investopedia.com/terms/m/matchingcontribution.asp), you should save at least enough to get the maximum amount. A typical match may mean a dollar-for-dollar match on the first 3% and then 50 cents on the dollar on the next 2%. An employer match is considered an additional benefit of your job, like health insurance or vacation days.1 Employers may require "[vesting](https://www.investopedia.com/terms/v/vesting.asp)," which requires you to stay at your job for a time to [keep the full match](https://www.investopedia.com/is-your-401-k-employer-match-too-good-to-be-true-what-the-fine-print-could-reveal-11763235). For example, employees might be entitled to 100% of the employer match if they've stayed 3 years, but none if they leave before then. ## Aim for 15% According to Fidelity, investors should aim to save 15% of their pre-tax income annually, including any match.1 A common rule of thumb is to set aside [at least 10% of your gross earnings](https://www.investopedia.com/ask/answers/100314/there-minimum-i-have-contribute-my-401k-plan.asp). Those who save early in their careers benefit from the power of [compounding](https://www.investopedia.com/terms/c/compounding.asp), which happens when you earn returns on top of earlier profits. For example, if an employee at age 25 puts \$2,000 into the market every year for eight years at an average annual return of 8% will have \$125,000 by age 55. An employee who waits to begin until age 33 would have to invest almost three times as much to acquire the same amount by age 55.2 ### Warning Employees may not be eligible for a full employer match if they are [highly compensated employees (HCE)](https://www.investopedia.com/terms/h/highly-compensated-employee.asp), own more than 5% of a company, or if their compensation exceeds a set IRS threshold. In 2025 and 2026, employees are HCEs if they make at least \$160,000.341 ## Use Your Age As a Guide How much you can save in a 401(k) will depend on your income and life circumstances. Investment firms such as Fidelity often recommend an every-10-years model, where you aim to have a certain number of years of income saved every 10 years:5 - Save your [annual starting salary by age 30](https://www.investopedia.com/contributing-to-401-k-in-20s-11764698) - Save three times your salary by age 40 - Save six times your salary by age 50 - Save eight times your salary by age 60 - Save 10 times your salary by age 67 These numbers aren't exclusive to your 401(k) and include other accounts such as a [Roth IRA](https://www.investopedia.com/terms/r/rothira.asp). Figures also assume that you began investing early enough to take advantage of compound interest and have other savings available in wealth-generating accounts such as stocks or [mutual funds](https://www.investopedia.com/terms/m/mutualfund.asp). ## Contribution Limits Employees need to know the [annual contribution limits](https://www.investopedia.com/should-max-out-401k-early-5324697) set by the [Internal Revenue Service (IRS)](https://www.investopedia.com/terms/i/irs.asp). These limits apply to employee contributions only. Employer-matching is not factored into these limits. The contribution limit for employees under 50 who participate in a 401(k) plan is \$23,500 in 2025, increasing to \$24,500 in 2026. If you're 50 or older, you can also make additional [catch-up contributions](https://www.investopedia.com/terms/c/catchupcontribution.asp) of up to \$7,500 in 2025 and \$8,000 in 2026. Under a change in SECURE 2.0, a higher catch-up contribution limit of \$11,250 applies in 2025 and 2026 for employees aged 60, 61, 62, and 63.46 These contribution limits apply to other plans, such as [403(b)](https://www.investopedia.com/terms/1/403bplan.asp), most [457](https://www.investopedia.com/terms/1/457plan.asp) plans, and the federal government's [Thrift Savings Plan](https://www.investopedia.com/terms/t/thrift_savings_plan.asp).6 ## Additional IRA Savings For those who want to go even further, there are several options for other retirement accounts. A popular choice is a [traditional IRA or a Roth IRA](https://www.investopedia.com/retirement/roth-vs-traditional-ira-which-is-right-for-you/). An IRA is a retirement plan that anyone can set up and contribute to, unlike a 401(k). For a traditional IRA, you contribute [pretax](https://www.investopedia.com/terms/p/pretaxcontribution.asp) dollars, so you are not taxed the year you earn that money. Instead, you are taxed when you make withdrawals, typically in retirement. The contributions reduce the amount of income you pay taxes on. It will also [reduce adjusted gross income (AGI) calculations](https://www.investopedia.com/ask/answers/111815/do-401k-contributions-reduce-agi-andor-magi.asp). A Roth IRA is funded with after-tax dollars, so you pay taxes when you earn, not when you withdraw it.7 The limit on IRA contributions for tax years 2025 is \$7,000 and \$8,000 in 2026. Roth IRAs also have income limits based on your tax status. Single filers cannot have a modified adjusted gross income (MAGI) of more than \$165,000 in 2025 and \$168,000 in 2026 to contribute to a Roth IRA. For a [married couple filing jointly](https://www.investopedia.com/terms/m/mfj.asp), the MAGI limit is \$246,000 in 2025 and \$252,000 in 2026.68 ## What Is the Minimum Percentage I Should Contribute to My 401(k) Per Paycheck? Aim to contribute enough from each paycheck to get your employer-match. If your employer offers a 3% match, contribute at least 3% of each paycheck to your 401(k). ## When Should I Start Contributing to a 401(k)? The money you contribute to a 401(k) in your 20s will have the longest time to grow and earn compound interest. For 2025, an individual can contribute \$23,500 for workers under 50, increasing to \$24,500 in 2026.86 ## What Is the 4% Rule? The 4% rule suggests that a retiree should be able to withdraw 4% of the balance in their retirement account in the first year after retiring, and then withdraw the same dollar amount, adjusted for [inflation](https://www.investopedia.com/terms/i/inflation.asp), every year. Consider the rule of thumb that during retirement, you'll be able to live a lifestyle that is 80% the cost of your current lifestyle. Take your current annual expenses and use the 4% rule to estimate how large a nest egg you'll need. ## The Bottom Line There are many variables to consider when thinking about retirement. Are you married? Is your spouse employed? How much can you expect from a [pension](https://www.investopedia.com/terms/p/pensionplan.asp) or [Social Security benefits](https://www.investopedia.com/terms/s/social-security-benefits.asp)? And what will your retirement look like? An average savings of 15% of your salary is a good base to contribute toward your retirement fund. At a minimum, you should contribute enough to secure a company match.
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