Am I saving enough in my 401(k)?

It is one of the most common questions employees ask, whether at a plan enrollment meeting or at the kitchen table: "Am I saving enough?" Most people know they should be saving something. Far fewer know whether the amount coming out of each paycheck is on track for the retirement they have in mind.

There is no single right number for everyone. There are, however, a few practical benchmarks that can tell you whether you are in the right neighborhood, and a few simple moves that can close the gap if you are not.

Step one: get the full match

If your employer matches your contributions, start there. A match is money your employer adds to your account when you contribute. Contributing less than the amount needed to receive all of it means leaving part of your compensation on the table.

Match formulas vary from plan to plan. Two common examples:

• 100% of the first 3% of pay, plus 50% of the next 2%. You contribute 5% and your employer adds 4%.
• 50% of the first 6% of pay. You contribute 6% and your employer adds 3%.

Your summary plan description or your recordkeeper's website will show your plan's formula. Check the vesting schedule too, since it determines when employer contributions fully become yours.

The 15% guideline

Fidelity Investments suggests saving about 15% of your pay each year, starting by age 25, and that 15% includes your employer's contributions. If your employer adds 4%, you would contribute 11% to reach the target.

That figure is a planning guideline, not a rule. It assumes you start saving in your mid-twenties, retire around age 67, invest roughly half or more of your savings in stocks over time, and want a lifestyle in retirement similar to the one you have while working. If you started later, plan to retire earlier, or expect to spend more, you may need to save more. If you will have a pension or other income sources, you may need less.

How most people compare

Vanguard's How America Saves 2026 report, which covers nearly five million workers in plans Vanguard recordkeeps, found an average employee deferral rate of 7.6% in 2025 and a median of 6.6%. Counting employer contributions, the average total contribution rate was 12.1%. That is an all-time high for the report, but it is still below the 15% guideline.

In other words, if you and your employer together are putting in less than 15%, you have plenty of company. That does not make the gap any smaller, but it does mean closing it is a normal, solvable problem.

Checking your balance by age

A savings rate tells you whether you are on pace going forward. Your balance tells you where you stand today. Fidelity also publishes balance milestones expressed as a multiple of your salary:

• By age 30: 1 times your salary
• By age 40: 3 times your salary
• By age 50: 6 times your salary
• By age 60: 8 times your salary
• By age 67: 10 times your salary

For example, someone earning $80,000 at age 40 would be on track with about $240,000 saved. These milestones count all of your retirement savings, not just your current 401(k), so include old employer plans, IRAs, and other accounts set aside for retirement. They rely on the same assumptions as the 15% guideline, so treat them as a rough check rather than a pass or fail grade.

Why your number may be different

Rules of thumb are built for an average person, and no one is average. A few factors can move your target up or down:

• When you plan to retire. Retiring earlier means fewer years of saving and more years of spending.
• Other income. Social Security, a pension, rental income, or part-time work in retirement all reduce how much your savings need to provide.
• Your household. A spouse's retirement savings, or the lack of it, changes the picture for both of you.
• Expected spending. A paid-off home lowers expenses. Travel, supporting family members, and health care before Medicare can raise them.
• When you started. Starting at 40 instead of 25 usually calls for a higher savings rate to reach the same goal.

A retirement projection that uses your actual numbers will give you a far better answer than any guideline.

2026 401(k) contribution limits

If you want to save more, here is how much the IRS allows for 2026:

• Employee deferrals: up to $24,500, combining pre-tax and Roth contributions.
• Catch-up contributions, age 50 and older: an additional $8,000, for a total of $32,500.
• Higher catch-up, ages 60 to 63: an additional $11,250 instead of $8,000, for a total of $35,750.
• Total from all sources: employee and employer contributions combined cannot exceed $72,000, or 100% of your pay if less, not counting catch-up contributions.

Catch-up contributions are available only if your plan allows them. Starting in 2026, if you earned more than $150,000 in FICA wages from your employer in 2025, any catch-up contributions you make must be Roth contributions. The IRS typically announces the next year's limits in late October or November, so watch for the 2027 figures soon.

Ways to save more without feeling it

• Increase by 1% at a time. On a $60,000 salary paid every two weeks, a 1% increase is $600 a year, or about $23 per paycheck before taxes. If the contribution is pre-tax, the change in your take-home pay will be smaller than that.
• Use automatic increases. Many plans let you schedule your contribution rate to rise automatically each year. Set it once and let it work.
• Save part of every raise. Directing half of each raise to your 401(k) increases your savings while your take-home pay still goes up.
• Redirect freed-up cash. When a car loan or other debt is paid off, move some of that monthly payment into your plan.

Saving more for retirement should not come at the expense of everything else. An emergency fund and a plan to pay down high-interest credit card debt deserve a place alongside your 401(k), and getting the full match usually makes sense even while you work on both.

Watch out for a missed match

If you plan to max out your 401(k), check how your plan calculates the match. Some plans match each paycheck separately. If you reach the annual limit early in the year and your contributions stop, you may miss matching dollars for the rest of the year unless your plan makes a year-end "true-up" contribution. Your HR team or plan administrator can tell you how your plan works.

Saving enough is only part of the picture

How much you save matters most, but how your account is invested, what you pay in fees, and whether you have a plan for turning savings into income all affect the result. A periodic review of all three can help keep you on track.

Want a clearer answer to "Am I saving enough?" Brian Williams, CPFA®, of Northshire Consulting LLC | Registered Investment Advisory Firm works with individuals and families on retirement and financial planning, and with employers on their 401(k) plans. Call 203-401-6062, email bwilliams@northshireconsulting.com, or visit northshireconsulting.com to schedule a conversation.

Frequently asked questions

Does my employer's match count toward the 15%?

Yes. The 15% guideline includes both your contributions and your employer's. Employer contributions do not count toward your $24,500 employee deferral limit, though.

I am behind. Is it too late?

No. Raising your savings rate, using catch-up contributions after age 50, working a few years longer, and delaying Social Security are all ways to narrow a gap. The earlier you start making changes, the more options you have.

Do Roth contributions count toward the limit?

Yes. Pre-tax and Roth 401(k) contributions share the same $24,500 limit for 2026. The choice between them affects when you pay taxes, not how much you can contribute.

What if I can't afford 15% right now?

Start with the amount needed to get the full match, then increase your rate by 1% each year or whenever you get a raise. Steady progress matters more than hitting the target on day one.

This material is for educational purposes only and is not individualized investment, tax, or legal advice. Savings guidelines and survey data from third parties are cited for general reference and reflect their publishers' assumptions. Advisory services are offered through Northshire Consulting LLC | Registered Investment Advisory Firm.