How to Maximize Your 401k Savings by Age

Adrianna Adams, CFP®
Aug 25
 min read · 
Learn how much you should be investing in your 401k.

Learn how much you should be investing in your 401k.

Maximizing Your 401k Savings by Age

Saving for retirement is essential to ensure a comfortable and financially stable future. A 401k is one of the most popular and effective ways to save for retirement, as it offers tax advantages and potential employer contributions. By understanding how to maximize your 401k savings based on your age, you can make the most of this valuable retirement tool.

Understand Your Retirement Goal

Before you begin contributing to your 401k, it's important to understand your retirement goal. How much money will you need to live comfortably in retirement? This number can vary greatly based on your lifestyle and other factors, but it's important to have a general idea. You can use online retirement calculators or work with a financial advisor to determine your retirement savings goal.

Consider Your Employer Contributions

Many employers offer 401k matching contributions, which can significantly boost your savings. Make sure you understand your employer's matching policy and contribute enough to take full advantage of it.

Age 25-35: Focus on Retirement Savings

If you're in your 20s or early 30s, now is the time to start building a solid foundation for your retirement savings. While it can be tempting to prioritize other financial goals, such as paying off debt or saving for a down payment on a house, it's important to make retirement savings a top priority. At this age, you have the benefit of time and compounding interest on your side, which can significantly increase the value of your retirement savings over time.

Take Advantage of Catch-Up Contributions

If you're over 50, you can take advantage of catch-up contributions, which allow you to contribute more money to your 401k each year. In 2023, the catch-up contribution limit is $6,500, in addition to the regular contribution limit of $19,500. By making catch-up contributions, you can accelerate your retirement savings and potentially reduce your tax bill.

Age 36-45: Retirement Savings Should Be Top Priority

As you move into your late 30s and 40s, retirement savings should be a top priority. At this age, you may have additional financial responsibilities, such as children or a mortgage, but it's important to continue to prioritize your retirement savings. Consider increasing your contributions to your 401k or other retirement accounts, such as an IRA, to make the most of your savings potential.

Age 46-55: Aim to Max Out Your 401k Contribution

In your late 40s and early 50s, you should aim to max out your 401k contribution. In 2023, the maximum contribution limit for a 401k is $61,000, including catch-up contributions. By contributing the maximum amount allowed, you can accelerate your retirement savings and potentially reduce your tax bill. It's also a good time to consider other investment options, such as a brokerage account or real estate, to diversify your portfolio.

Age 56 and Over: Increase Contributions to Catch-Up Limits

If you're over 56, you should consider increasing your contributions to catch-up limits. This can help you accelerate your retirement savings and potentially reduce your tax bill. It's also important to start planning for required minimum distributions (RMDs), which are mandatory withdrawals from your retirement accounts that begin at age 72. By understanding the RMD rules and planning accordingly, you can avoid penalties and maximize your retirement savings.


Maximizing your 401k savings is a critical part of planning for retirement. By understanding the benefits associated with each age group and taking the necessary steps to make the most of your 401k savings, you can secure a comfortable and financially stable future. Remember, the sooner you start saving for retirement, the better off you'll be in the future.

Important Disclosures:
Domain Money Advisors, LLC is providing this information for informational purposes only. While Domain Money Advisors, LLC believes that the information contained herein is reliable and derived from reliable sources, it makes no representation, warranty or undertaking, stated or implied, as to the accuracy or completeness of the information. Domain Money Advisors, LLC, and its parent company, Domain Money, Inc., expressly disclaims any liability or loss incurred by any person who acts on the information, ideas or allocations discussed. The information contained herein is not, and shall not constitute financial or investment advice, an offer to sell, a solicitation of an offer to buy or an offer to purchase any securities, nor should it be deemed to be an offer, or a solicitation of an offer, to purchase or sell any investment product or service.  No investment advisory relationship has been formed between Domain Money and the reader.  Investing comes with inherent risks and you should always invest within your means and risk tolerance.  Past performance is not an indication of future returns and you should always consult a financial advisor prior to making investment decisions. Please see important disclosures at

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