How To Increase Your Retirement Contributions
Summary
Increasing your 401(k) contributions can be one of the most effective ways to strengthen your retirement outlook. Even small increases may significantly boost long-term savings, reduce taxes, and help close the gap between where most investors are today and where they need to be.
Why Increasing 401(k) Contributions Matters
The Power of Compounding
The more money you have invested, and the earlier it’s invested, the more time it has to grow. According to Fidelity, even modest increases in contribution rates can result in dramatically higher retirement balances over a full career, especially when combined with employer matching and long-term market growth.[1]
Tax Advantages You Can Use Right Now
Contributing more to a traditional 401(k) lowers your taxable income today. Every additional dollar you defer reduces your current tax bill while building future retirement income.
Increase Future Financial Security
Maxing out your contributions may be the difference between a stressful retirement and a secure one – and possibly allow you to maintain more of your lifestyle and cover unexpected costs.
401(k) Contribution Limits for 2026
If you’re age 50 or older, you can add an $8,000 catch-up contribution, bringing your total to $32,500.
And for workers ages 60, 61, 62, or 63, a special “super catch-up” allows contributions of up to $11,250 above the standard limit, for a maximum employee contribution of $35,750.[2]
How Much Should You Be Contributing to Your 401(k)?
Here’s the reality: Not everyone can max out – and that’s okay.
If you can afford to contribute the maximum, it’s generally smart to do so. Higher contributions mean more tax advantages today and greater potential growth over time.
If you can’t max it out, many financial professionals suggest working toward saving 15% of your pre-tax salary.[1]
That said, the “right” contribution amount is the one you can make consistently while still funding priorities like emergency savings and short-term goals.
The goal is progress, not perfection.
At a minimum, you should contribute enough to get your full employer match.
And remember: Your contribution rate isn’t locked in.
You can increase, decrease, or pause contributions as your financial situation changes, especially after raises, bonuses, or major life events.
Start Small and Automate Increases
One of the most effective strategies is also the simplest: Start small and automate your increases.
If increasing contributions feels intimidating, begin with just 1-3%.
Then commit to raising your contribution by 1% each year.
Most people barely notice a 1% increase in their paycheck, but over time, the impact on retirement savings may be substantial.
Use Windfalls to Boost Contributions
Windfalls – such as bonuses, commissions, or tax refunds – are prime opportunities to increase retirement savings.
Directing even a portion of irregular income toward retirement may meaningfully improve long-term outcomes without affecting day-to-day cash flow.
Instead of viewing a bonus as “extra spending money,” consider:
- Making a one-time 401(k) contribution increase
- Permanently raising your deferral rate after the bonus hits
- Using the windfall to offset the short-term impact of higher contributions
This approach helps prevent lifestyle creep while strengthening your retirement plan.
Take Advantage of Your Employer Match No Matter What
Your employer match is essentially free money.
It is a powerful tool that may help you maximize your 401(k) retirement income – without contributing any additional money of your own.
How much you receive depends on the terms of your 401(k) plan.
Many employers match a percentage of employee contributions, up to a certain portion of the total salary. However, some match employee contributions up to a certain dollar amount.
If you’re unsure what your company match is, contact HR or your plan administrator.
Be Intentional about Your Cash Flow
Expenses have a way of creeping up, especially after raises or lifestyle changes.
Building strong habits around budgeting and regularly reviewing your spending can help prevent lifestyle creep.
A good rule of thumb: When your income rises, increase savings first and then adjust spending.
Seek Professional Help for Your Retirement Savings
401(k) Maneuver provides professional 401(k) account management designed to help you grow and protect your 401(k) account.
Our goal is to increase your account performance over time, manage downside risk to minimize losses, and reduce fees that are hurting your retirement account performance.
When you enroll with 401(k) Maneuver, here’s what you can expect:
- Quarterly reviews and rebalancing personalized to your risk tolerance and the current market conditions.
- Email updates every time we review and adjust your account.
- Independent fiduciary advice focused entirely on your best interests.
- No in-person meetings required. Everything is handled online through our secure platform.
- Access to our online community, exclusive content, and a private Facebook group for professional insights.
Your 401(k) stays exactly where it is, and we manage it for you.
Key Takeaways
- Increase your contribution rate by 1% today.
- Adjust contributions after a raise or bonus.
- Small, repeated actions often matter more than big, one-time decisions.
- Revisit elections during open enrollment.
- Review your contribution rate at least once per year and adjust accordingly.
- Get professional help.
Have questions about your 401(k) performance? Book a complimentary 15-minute 401(k) Strategy Session with one of our advisors.
Sources
Fidelity Investments. How to Max Out Your Retirement Contributions. Fidelity Learning Center, Fidelity Investments. 2026. https://www.fidelity.com/learning-center/personal-finance/retirement/how-to-max-out-your-retirement-vp
[2] Internal Revenue Service (IRS). 401(k) Limit Increases to $24,500 for 2026; IRA Limit Increases to $7,500. IRS News Release, Notice 2025-67, published November 13, 2025.
https://www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500
