I’m putting $23,500 into my 401(k) this year. If I do this for 10 years and earn an average 8% return, I’ll have over $340,000 in my 401(k) account. And continuing for 20 years would put me over $1 million.

It’s a big number to save, but I treat it like any other monthly bill. Here’s the system I’m using to make it all happen.

I treat it like a bill, not a leftover

I get paid twice a month, so to hit my $23,500 goal this year, I’ve set up about $1,000 to come out of every paycheck automatically.

Then I just live on what’s left. Some months I feel a squeeze. But other months I’ve totally been able to make it work and can even build a small buffer.

There’s a reason “pay yourself first” is one of the oldest rules in personal finance — because it actually works. If I had to manually save that much, I’d be battling temptation with every single paycheck (and let’s be honest, I’d probably lose that fight some months).

I cut back on things I don’t miss

To be real, I’ve had to make some trade-offs. But now that I’m being more intentional with my spending, I’m actually seeing a lot of positives come from it.

One area I’ve cut back on big time is buying my kids “stuff.” I want to spoil them — partly because I didn’t have much growing up. But now I think twice before jumping on Amazon or heading to Target just to grab something new.

Here’s a good example: this summer, my 6-year-old needed a new bike. My first instinct was to take him to Target and let him pick out a shiny $300 one. I wanted to see the look on his face!

But I fought the urge, hit pause, and decided to look for a cheaper option.

Sure enough, two days later, I met another parent at the park who gave us — no joke — two hand-me-down bikes for free. Both fit my son perfectly, and he couldn’t be happier.

It’s not just kids’ stuff. I’m rethinking every spending category in my life. All the money I’m saving here and there really adds up. And I don’t feel like I’m missing out at all.

I ignore the market and stick to the plan

In 2025, the 401(k) contribution limit is $23,500 (or $31,000 if you’re 50 or older.) So my plan is to contribute the maximum.

Since this is a retirement account I won’t touch for 20+ years, I’m not trying to beat the market or do any fancy investing. My plan is to invest in low-cost index funds, and let time and compounding do the heavy lifting.

And if I can consistently max out my 401(k) each year going forward, the payoff will be huge.

Here’s what my account could look like after a couple decades, assuming an 8% return (slightly under the S&P 500 historical ~10% average annual return):

Data source: Author’s calculations.

Of course, plans change and priorities shift over time. I don’t know if I’ll stick to this exact plan forever. But for now, I’m thinking long term with every dollar I put away.

I’m also building up a Roth IRA

My 401(k) isn’t the only place I’m saving retirement dollars. My wife and I also have Roth IRAs we contribute to every year. Our goal is to have both pre-tax and post-tax buckets of money to withdraw from.

Roth IRAs are especially great if you think you’ll be in a higher tax bracket later. And even if you can’t max one out right now, contributing a little bit each year still adds up.

Better yet, some brokers actually offer an IRA match! For example, right now SoFi Invest® offers a 1% match on IRA contributions (or eligible rollovers). Read our full SoFi Invest® review here to learn more.

One year at a time

So that’s my plan for 2025 — and hopefully for 2026 and beyond. Some years I might be able to max out both my 401(k) and Roth IRA. Other years, maybe not. And that’s OK.

What matters most is that I’m staying consistent, being thoughtful with my spending, and giving every dollar a job.

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