How Much Should I Contribute to My 401(k)?

The first step is to contribute enough to capture your full employer match. That is effectively free compensation; not taking it usually means leaving money on the table.

Once you are capturing full match, the next question is how much more you can sustainably contribute. A common rule of thumb is around 15% of salary toward retirement, including employer contributions, but your target depends on when you started, your retirement age, and your current balance.

A contribution rate you can keep for years beats a high rate you abandon when life gets expensive. Start at a level that fits your budget, then plan automatic increases when you get raises or bonuses.

For many workers, 6% to 10% of salary is a reasonable early target if they are also getting a match. Moving toward 10% to 15% is stronger for long-term retirement readiness, and many late starters will need 15% or more.

A percentage feels abstract until you turn it into dollars. On an $80,000 salary, 6% is $4,800 per year, 10% is $8,000, and 15% is $12,000 before any employer match is added.

Use the calculator to compare your current rate with a slightly higher one. A 2 percentage-point increase sustained for decades can add meaningfully to your retirement balance, and seeing the annual dollar amount makes the tradeoff easier to understand.

Salary increases, debt payoff, and expense changes are natural times to bump your contribution. Do not wait for a perfect moment; a modest increase now is usually better than a large one later.

Many savers increase by 1 to 2 percentage points per year until they reach their target. If you are getting close to the annual contribution limit, confirm the current limits and adjust your percentage so you do not cap out early and miss employer match later in the year.