One of the most common retirement planning questions we hear is: How much should I contribute to my 401(k)? While the answer depends on your income, goals, and retirement timeline, there are some general guidelines that can help you maximize your savings.

At Cornerstone Portfolios, we help individuals and families build a retirement strategy that fits their financial future. Here’s what you need to know about 401(k) contributions.

What Is a 401(k) Contribution?

A 401(k) is a retirement savings plan offered by employers that allows you to contribute pre-tax or Roth (after-tax) dollars directly from your paycheck. Contributions can grow tax-deferred (traditional) or tax-free (Roth), making it one of the most effective ways to save for retirement.

How Much Should You Contribute to Your 401(k)?

The General Rule of Thumb

Financial experts often recommend contributing 10%–15% of your income toward retirement, including your employer match if available.

Start With Your Employer Match

If your employer offers a 401(k) match, contribute at least enough to get the full match. For example, if your employer matches 4%, and you only contribute 2%, you’re leaving free money on the table.

Aim to Max Out If Possible

In 2025, the IRS contribution limit is:

  • $23,000 if you’re under age 50

  • $30,500 if you’re age 50 or older (includes the $7,500 catch-up contribution)

If your budget allows, maxing out your 401(k) can significantly boost your retirement savings.

Factors That Affect How Much You Should Contribute

Your Age and Retirement Timeline

Younger investors can start small and increase contributions over time, while those closer to retirement may need to contribute more aggressively.

Your Other Financial Goals

Balancing student loans, saving for a home, or building an emergency fund might affect how much you can contribute today — but consistency is key.

Tax Benefits

Higher contributions can lower your taxable income if you’re contributing to a traditional 401(k).

Strategies to Increase Your 401(k) Contributions

  • Start small, then increase yearly — even 1% increases add up over time.

  • Use raises or bonuses to boost your savings without affecting your take-home pay.

  • Review your plan annually to make sure your contributions align with your long-term goals.

Get Guidance for Your 401(k) Strategy

Deciding how much to contribute to your 401(k) doesn’t have to be complicated. At [Your Firm Name], we help you evaluate your options, create a retirement savings plan, and make sure you’re on track for the future you want.

👉 Contact us today to schedule a consultation and take the guesswork out of your retirement savings.