401k

Two big reasons to celebrate today: First, it’s Friday (and who doesn’t love Fridays?). And second, it’s National 401(k) Day! Woot woot!

OK, so it’s not exactly a party holiday, but if you’ve got a 401(k), today’s the perfect excuse to give it a quick once-over. Taking five minutes to check on your retirement account could save you thousands down the road. Tiny tweaks can add up big time.

Here are three quick things to look at right now (plus one bonus tip to go beyond your 401(k)).

1. Check your contribution rate

First things first: If you’re not contributing at least enough to snag any provided company match in full, you’re basically saying “no thanks” to free money.

If you’re not sure what your company offers (or you’re confused about 401(k) plans in general) ask HR to explain it to you. Don’t be shy — they love talking about benefits.

Next, consider bumping up your contributions a little higher.

Upping your savings by just 1% can make a huge difference over time. Most plans let you increase it in just a few clicks — and then you don’t have to think about it again.

For 2025, the contribution limit is $23,500 (or $31,000 if you’re 50+). No pressure to max it out, but knowing the target gives you something to shoot for.

Here’s what different contribution levels might look like on a $70,000 salary:

Data source: Author’s calculations.

Set it and forget it. One small change now can quietly grow into something huge later.

2. Review your investments

When was the last time you peeked under the hood?

Many 401(k) plans default you into a target-date fund based on your expected retirement year. That’s not necessarily bad, but sometimes it’s not always aligned with your risk tolerance or goals.

Ask yourself:

• Are you too aggressive or too conservative for your age?
• Are your fees higher than they should be?
• Do your investments reflect how far off retirement really is?

I try to review my allocations at least once a year to make sure they’re still working for me. I’m only 40, so I’ve got another two decades before I can think about withdrawals. My focus is on long-term growth, not short-term profits.

3. Consolidate old 401(k) accounts

If you’ve switched jobs a few times, there’s a good chance you’ve got an old 401(k) (or two) just chillin’ somewhere out there.

This happens a lot, actually. Capitalize estimates there are over 29 million forgotten 401(k) accounts in the U.S., holding about $1.65 trillion in assets!

If you want to make life way easier, roll over those old 401(k)s into an IRA. It’s tidier, gives you more control over investments, and can also save you on fees.

And here’s a cool idea… Some brokers are offering 1% match incentives for 401(k) to IRA rollovers. You could snag a little bonus! I recommend checking out Robinhood’s current offer. Read our full Robinhood review here to see if it’s a fit for you.

Think beyond the 401(k)

Just because it’s National 401(k) Day doesn’t mean your retirement plan has to stop there.

401(k)s are great, but they’re only one piece of the puzzle. To give yourself more flexibility (and some potential tax-saving superpowers later), it’s smart to build a mix of account types.

Personally, I’m aiming to build a big portfolio across both pre-tax accounts (like a 401(k) or IRA) and post-tax options like a Roth IRA or a regular brokerage account. That way, when retirement comes, I’ve got options to pull from. And a lot more control over how and when I pay taxes.

If you want to round out your retirement plan, check out:

• Roth IRAs for tax-free growth and withdrawals
• Traditional IRAs for more pre-tax savings
• Brokerage accounts for total flexibility, no age limits or early withdrawal penalties

No matter where you’re starting from, a few small moves now can make a massive difference later.

So give your 401(k) a quick check, tidy things up, and take one step closer to that dream retirement — whatever it looks like for you.

Explore all the top brokers for beginners and start building a more flexible retirement strategy today.

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.

Ready to start or level up your retirement savings? Compare top brokers and find the right account for your goals.

The 401(k) account is one of the most common retirement savings accounts that employers offer their workers. Employees are able to contribute pre-tax dollars to these accounts and invest them tax-deferred. Only when withdrawals are made do the account holders pay taxes at their ordinary tax rate.

Employers have the option to offer some kind of matching contribution, usually up to a set percentage of each employee’s salary. Employer contributions are deductible up to a certain point.

With everyone making different salaries and employers having different policies for their 401(k) plans, it’s natural for workers to wonder how much they should save as they approach retirement. While there is no single right answer, available data can help you gauge where you stand.

Image source: Getty Images.

The average 401(k) balance for retirees age 60 and older

While several companies provide data on the average 401(k) balance, I like to use Fidelity when I can, given the company’s size and reputation in the space.

At the end of 2024, Fidelity looked at 401(k) data from 26,700 corporate defined contribution plans that included 24.5 million participants. The company found that the average 401(k) balance was $246,500 for ages 60 to 64, $251,400 for ages 65 to 69, and $250,000 for ages 70 and over.

Fidelity actually recommends saving much more than this amount. In prior articles, the company has suggested having eight times your annual salary by age 60 and 10 times your annual salary by age 67. With median annual earnings for a full-time U.S. worker above $50,000, Fidelity’s recommendation is far higher than the approximately $250,000 average balance for its plan participants near retirement.

But again, there’s always a difference between advice and reality. Retirees should also understand that an average number among tens of millions of people captures so many different scenarios. Ultimately, retirees should think about the lifestyle they want in retirement and work with a financial advisor or on their own to determine how much they need to support that lifestyle.