Whereas your purpose ought to ideally be to save lots of 10 to fifteen p.c of your revenue for retirement, don’t be discouraged should you can’t contribute at that stage but, mentioned Kyle McBrien, a licensed monetary planner with Betterment, a monetary companies agency. “It’s OK to begin small,” he mentioned. Goal to extend your contribution progressively annually.

Even should you can contribute the utmost quantity, that doesn’t essentially imply you need to, Mr. McBrien mentioned. When you haven’t constructed up an satisfactory rainy-day fund for shock bills or a job loss, as an example, that ought to take precedence earlier than you contribute to your 401(okay) past your employer’s match.

“Replenish your emergency fund first,” he mentioned.

You could have different objectives to save lots of for in addition to retirement, mentioned Craig Copeland, director of wealth advantages analysis on the Worker Profit Analysis Institute. Maybe you’ve got youngsters and wish to save for his or her schooling in a 529 school fund or wish to contribute to a well being financial savings account — a particular account that may cowl short-term medical wants or be invested for retirement.

“When you do have {dollars} to save lots of,” he mentioned, “take into consideration the place they need to go.”

Listed here are some questions and solutions about saving in a 401(okay):

Do additional 401(okay) contributions must be handled as Roth contributions if I’m a excessive earner?

Not but. Below the Safe 2.0 Act, a regulation handed late final yr, savers incomes $145,000 or extra who make 401(okay) catch-up contributions would have needed to make them as after tax Roth contributions beginning in 2024. However this summer season, the I.R.S. delayed that provision for two years, after employers and plan directors mentioned they wanted extra time to arrange. (Not each 401(okay) plan provides a Roth possibility.) So for subsequent yr and for 2025, at the least, additional contributions for these 50 and older could also be made pretax to a conventional 401(okay), even for prime earners.

Can I modify the quantity of my 401(okay) contributions after open enrollment?

The annual open enrollment interval, when staff select their advantages for the brand new yr, is underway at many workplaces. However whereas medical insurance selections are sometimes mounted for the total yr until you’ve got a giant change in your life, many employers allow you to tweak your retirement contributions at any time. (Test together with your employer to make certain.) Word that after you make a change, it might take a paycheck cycle or two for it to take impact, mentioned Mr. McBrien at Betterment.