How Much Should You Be Contributing to Your 401k by Age? Tips for Planning Your Retirement

How Much Should You Be Contributing to Your 401k by Age? Tips for Planning Your Retirement

At Vance Wealth, we understand that everyone's financial journey is unique and personal. We believe that you deserve a partner who can transform the complex into simple, providing clarity and a clear understanding of the path to your dreams and those of your family. 

Planning for retirement is a crucial aspect of personal finance, and we wanted to provide some guidance on one of the most effective tools for retirement savings a 401k plan. A 401k is a retirement savings plan offered by employers to their employees, where you can contribute a portion of your pre-tax income toward retirement savings. But how much should you be contributing to your 401k by age? We'll explore the answer to this question and give you some tips to help you plan for retirement.

Age 20-29:

When you're in your 20s, you have the benefit of time on your side, which means you can take more risks in your investments. The general rule of thumb is that you should aim to contribute at least 10% to 15% of your income to your 401k in your 20s. If your employer offers a matching contribution, take advantage of it, as it's effectively free money.

Age 30-39:

In your 30s, you should aim to increase your contributions to your 401k. Financial experts recommend increasing your contributions to 15% to 20% of your income during this stage. If you have yet to contribute much to your 401k, don't worry. It's never too late to start! 

Age 40-49:

In your 40s, you should aim to save at least 20% of your income toward your 401k. This is when you're likely to earn more than in your 20s or 30s, so it's a good idea to increase your contributions accordingly. You may also want to consider rebalancing your portfolio to ensure that you're investing in a mix of stocks, bonds, and other assets that align with your risk tolerance and life goals.

Age 50 and beyond:

Once you're 50 or older, you can take advantage of catch-up contributions, which allow you to contribute more than the regular annual limit. For example, for 2024, the annual contribution limit is $23,000, but those over 50 can contribute an additional $7,500. Although we understand every situation is unique, we typically recommend that you aim to save at least 25% of your income towards your 401k in your 50s and beyond.


Planning for retirement can be overwhelming, but it's important to remember that it's never too late to start. At Vance Wealth, we believe that no matter your age or financial situation, it's never too late to take steps toward securing your financial future. Whether you're in your 20s, 30s, 40s, or beyond, we can help you create a comprehensive retirement plan that aligns with your goals and aspirations. Book an appointment with us today to discuss your retirement goals, and let us help you take the necessary steps towards a financially secure future.

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Disclosures: Vance Wealth, Inc. (“Vance Wealth”) is a registered investment advisor. Advisory services are only offered to clients or prospective clients where Vance Wealth and its representatives are properly licensed or exempt from licensure. The views expressed in this commentary are subject to change based on market and other conditions. The information provided is for educational and informational purposes only and does not constitute advice. Vance Wealth does not provide tax or legal advice. You should contact your tax advisor and/or attorney before making any decisions with tax or legal implications. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. All investments include a risk of loss that clients should be prepared to bear. The principal risks of Vance Wealth strategies are disclosed in the publicly available Form ADV Part 2A.