The amount to contribute to a 401(k) depends on factors like employer match, retirement goals, and income. A common recommendation is to contribute at least enough to get the full employer match, as this is free money. Financial experts often suggest saving 10% to 15% of your income annually toward retirement, including 401(k) contributions and any employer match. In 2025, the IRS contribution limit is $23,500, with additional catch-up contributions allowed for those 50 or older.
Key Points:
- Contribute enough to get the employer match if available.
- Aim to save around 10%-15% of pretax income each year for retirement (including any employer match).
- IRS limit for 401(k) contributions in 2025 is $23,500, with possible catch-up contributions ($7,500 or higher for ages 50+).
- Start lower if needed and gradually increase contributions over time.
- Plan your savings according to your retirement needs and timeline.
This approach balances maximizing growth of retirement savings while taking full advantage of employer benefits and IRS limits.
