4 Ways to Set Your 401(k) Up for Success in 2026

Saving in a 401(k) could be one of the best financial decisions you'll ever make. You'll need money in retirement to supplement your Social Security. So the larger a 401(k) balance you have, the more comfortable life might be later on.

Whether you're new to funding a 401(k) plan or have been saving in one for years, you should know that the right moves could help your savings take off. Here are a few things you can do to set your 401(k) up for success this year.

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1. Claim your company match in full

A 401(k) match is money you should make every effort not to give up. Find out what your workplace match entails this year and try your best to snag it in full.

If you give up any portion of your company match, remember that you're not just saying no to that principal amount. You're also losing out on the opportunity to grow it into a larger sum over time.

Say you forgo $1,500 in matching dollars this year. If your 401(k) gives you an 8% annual return, which is a bit below the stock market's average, and you're 25 years from retirement, saying no to that $1,500 really means shorting yourself on over $10,000 when you factor in lost gains.

2. Choose the type of 401(k) that's best for your situation

Many companies these days offer both a traditional and Roth 401(k) plan. Contribution limits for both accounts are the same, but the difference lies in how they're taxed.

With a traditional 401(k), your money goes in tax-free, but withdrawals are taxed in retirement. With a Roth 401(k), your money goes in on an after-tax basis, but withdrawals in retirement aren't taxed. Roth 401(k)s also don't force savers to take required minimum distributions.

A traditional 401(k) may be your better option if you make a lot of money and are therefore in a higher tax bracket. But a Roth could make sense if you're in a lower tax bracket this year but expect to be in a higher one during retirement.

3. Make sure you're not overpaying for investments

You may find a variety of funds in your workplace 401(k). It's important to pay attention to not just strategy and performance, but fees.

Actively managed mutual funds and target date funds tend to charge considerably higher fees than passively managed index funds, so you may want to load up on the latter. The more you pay in fees, the more your returns get eroded over time.

4. Take on an appropriate amount of risk given your retirement timeline

When retirement is far off, you can afford to take on more risk in your 401(k). But as retirement nears, it's a good idea to shift toward investments that are more stable.

Take a look at how risky your current 401(k) investments are, and make sure the level of risk you've taken on is appropriate for where you are in your career. If you're thinking of retiring within the next five years, it may be time to move into investments that are generally less volatile. These may, depending on your plan's choices, include bond funds or dividend-focused funds.

The 401(k) moves you make in 2026 could help make your retirement savings journey a success. Focus on these to make the most of your efforts.

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