Fidelity's widely-cited rule of thumb says you should have 1× your salary saved by 30, 3× by 40, 6× by 50, and 8× by 60. It's a useful gut-check — but it's built on specific assumptions that may or may not match your situation.
401(k) Benchmarks by Age
- •Age 30: 1× your annual salary ($60,000 salary → $60,000 saved)
- •Age 35: 2× your annual salary
- •Age 40: 3× your annual salary
- •Age 45: 4× your annual salary
- •Age 50: 6× your annual salary
- •Age 55: 7× your annual salary
- •Age 60: 8× your annual salary
- •Age 67 (retirement): 10× your annual salary
These benchmarks assume you retire at 67, replace 45% of your income from savings (with Social Security covering the rest), and earn a 5.5% real annual return. If any of those assumptions differ for you, your target will be different.
Project Your Own 401(k) Balance
The Employer Match: Free Money You Cannot Afford to Skip
The most important 401(k) rule: always contribute enough to get your full employer match. A common match structure is "50% up to 6% of salary" — meaning if you earn $80,000 and contribute 6% ($4,800/year), your employer adds $2,400. That is a 50% instant return on those dollars. No investment beats it.
If you contribute less than the match threshold, you are leaving part of your compensation on the table. Prioritize the full match before paying down low-interest debt or investing elsewhere.
What to Do If You Are Behind
- 1.Increase contributions by 1% now. Most people do not notice the paycheck difference.
- 2.Use every raise to bump contributions — commit to saving half of each raise.
- 3.If you are 50+, use catch-up contributions: the 2025 limit is $23,500 + $7,500 catch-up = $31,000/year.
- 4.Consider a Roth 401(k) if your employer offers one — tax-free growth can be worth more in retirement.
- 5.Do not cash out when changing jobs. Roll the balance to an IRA or your new employer's plan.
The Contribution Limit in 2025
The IRS 401(k) contribution limit for 2025 is $23,500 for employees under 50. Those 50 and older can contribute an additional $7,500 catch-up, for a total of $31,000. Employer contributions do not count toward the employee limit but are capped at a combined $70,000 (employee + employer) for 2025.