Falling Short of Contribution Limits

Falling Short of Contribution Limits

What to do if you can’t hit the 401(k) contribution limit

A 401(k) is a great retirement savings tool. That’s in part due to the high contribution limits. The contribution limits typically increase every year, which means have the opportunity to put more money away if you’re able. If you can hit those limits, that’s great. But what if you can’t? Here are some ideas.

Aim For The Match

If you can’t hit the max contribution limit for your 401(k), try your best to hit your employer match. That’s free money. The employer match works in two different ways: They either match a certain percentage of your salary or they match up to a specific dollar amount. Either way, you want to try and hit that match point so you’re not leaving free money on the table. Consult HR for more details on how your company match works.

Do What You Can

Let’s say you can’t even hit the 401(k) employer match target. The most important thing is to make sure you are contributing something, no matter how small it is. Even if you can only contribute a few hundred a year, every little bit helps when it comes time to retire.

Use Other Savings Tools

Make sure you’re taking advantage of other savings vehicles too, like high-yield savings accounts or IRAs. If you can’t hit the max 401(k) contribution, you’ll want to be sure your money is getting a chance to grow as much as possible. Talk to your financial institution about the savings and investing opportunities they have available to help grow your retirement nest egg.


Do One Thing: If your employer offers a 401(k) match, do your best to hit that target. That’s free money that will help a lot during retirement.

Chris O'Shea

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