What's the Unfortunate Truth About Maxing Out Your 401(k)?

Maxing out your 401(k) sounds like one of the best moves you can make for your future. If you weren't able to save as much as you'd hoped when you were younger, contributing a large sum now could be a great way to make up for lost time.

The thing is, maxing out your 401(k) is challenging, and it's only getting harder over time. Fortunately, there's a silver lining.

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Maxing out your 401(k) has gotten harder

The IRS is in charge of deciding how much you're allowed to contribute to your 401(k) each year. As average incomes and the cost of living rise, the annual contribution limit increases too. This means that maxing out your 401(k) gets more difficult over time, and it was never easy to start with.

In 2025, adults under 50 had to set aside $23,500 to max out their 401(k)s. This limit is $24,500 in 2026. Unless you make well into the six figures, this might be out of reach for you.

It's even harder for older adults who are allowed to make catch-up contributions. In 2026, those aged 50 to 59 or 64 or older can save up to $32,500 in their 401(k)s, while those aged 60 to 63 by the end of the year can save up to $35,750.

While catch-up contributions are a nice option to have when you're behind on savings, the reality is that many older workers will never make them because they simply can't afford to. Most of their income has to go toward their current living expenses.

You don't need to max out your 401(k) to retire comfortably

The good news in all this is that maxing out your 401(k) isn't necessary to retire comfortably. Even if you only manage to save $10,000 in 2026 -- less than half the standard contribution limit -- that's still an amazing accomplishment. Over a few decades, that money could grow to be worth six figures.

Rather than trying to max out your 401(k), focus on claiming your full 401(k) match, if one is available to you, and then contributing whatever else you can afford. Don't wait until you feel you can make a large contribution. Focus on making smaller contributions on a schedule you can sustain.

If your lifestyle changes -- for example, you get a raise -- then you can think about changing how much you contribute to your 401(k). Raising your contribution amount first before you've had a chance to get used to the extra money is key to avoiding costly lifestyle creep.

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