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How much should you contribute to your 401(k)? How much you should contribute to your 401(k) depends on your income, current expenses, expected long-term expenses, age and contribution limits.
The IRS places contribution limits on 401(k)s: For 2024, the contribution limit is $23,000, with an additional $7,500 allowed in catch-up contributions for workers who are age 50 or older.
This is the average 401(k) balance for every age group. ... You can use rules of thumb to set savings goals, like estimating you'll need 10 times your final income invested before retirement.
For plans like a 401(k), 403(b), Thrift Savings Plan, some 457 plans and Simple IRAs and 401(k) plans, the total contribution limit for participants age 60 to 63 in 2025 is $34,750.
Age 25 and younger. Average 401(k) balance: $7,351. Median 401(k) balance: $2,816. The median balance for people just getting started in their careers is $2,816 . That means half of 401(k) plan ...
“Continue contributing to a Roth or traditional IRA, but remember the contribution limits are relatively low compared to a 401(k),” Meyer said. (The maximum contribution is $7,000 for 2024).
401(k) plan limits. 2024. 2025. Change. Maximum salary deferral for workers. $23,000. $23,500 +$500. Catch-up contributions for workers age 50 and older. $7,500
Based on 401(k) withdrawal rules, if you withdraw money from a traditional 401(k) before age 59½, you will face — in addition to the standard taxes — a 10% early withdrawal penalty ...