Created: June 24, 2022
Modified: September 9, 2022

Episode 72: How Much Should I be Saving in my 401(k)?

Heath Grossman here with Money Wisdom Question Series. Today’s question is in regards to 401(k)s. Specifically, how much should I be saving in my 401k?

Just Starting Out

The short answer to that question is: as much as you possibly can. But realistically, when I sit down with somebody, maybe that’s a little bit on the younger side and just starting out, I try to set the expectation that they should be saving somewhere between 10% to 15% of what they make. It’s a very good goal, something that is certainly achievable for many people.

Increase in Increments

If you’re not there, don’t feel bad. Maybe increase your 401(k) contribution by 1% and do that for six months or 12 months and then increase that by another one percent. If you do that incrementally, it’s not going to feel overly burdensome. All of this is a little bit of a balance. You need to have a certain amount coming in your paycheck to be able to live your lifestyle and put food on the table and pay a mortgage.

5-10 Years From Retirement

If you’re someone that’s getting a little bit closer to retirement, anywhere from 5 to 10 years away, we have to start thinking a little bit differently. We have to start thinking about the income planning aspect of retirement. Retirement is all about making sure that you have enough income coming in to live your lifestyle and do the things you want to do. What we suggest folks do that are 5 to 10 years away from retirement, is start to put together a retirement income plan. This also helps you work backwards mathematically to figure out if you are saving enough in your 401k. If we conduct a retirement income plan and you’re short, that starts to help us understand how much more you need to be saving and make sure that you’ll have enough in your 401(k) to produce enough income for yourself.

Thanks for joining me and I hope you found this information helpful!

P.S. If you enjoyed this topic and want to learn more, download your FREE copy of “The Ultimate 401(k) Guide”.

P.P.S. Feel free to submit questions here for a chance to have them answered!

  • Sandy and Thomas C.
    Sandy & Thomas C. are clients of Johnson Brunetti and received no compensation for their statement.

    “We always felt our financial needs were in very capable hands. Alex Angst is great to work with. Our advisor always made us feel he had our best interests at heart and explained things so we could understand them.”

  • Robert G.
    Robert G. is a client of Johnson Brunetti and received no compensation for his statement.

    “We’ve been clients of Johnson-Brunetti for > 10 years. We’re enjoying a comfortable retirement as a result. Many thanks to Joel and our CFP, Eric Hogarth. I wish we had plugged into this decade approach back when we were in our 30s.”

  • Lisa D.
    Lisa D. is a client of Johnson Brunetti and received no compensation for her statement.

    “Working with Johnson Brunetti has had a positive impact on my life by providing me with the knowledge, confidence, and peace of mind to move forward with my retirement plans. The process of getting to this point, through their guidance, has been informative and pleasurable.”

  • Ken D.
    Ken D. is a client of Johnson Brunetti and received no compensation for his statement.

    “I view your company as one that puts my interests first. I think that is very uncommon and very refreshing. “

  • Jeanne P.
    Jeanne P. is a client of Johnson Brunetti and received no compensation for her statement.

    “Matt does an awesome job! So easy to understand and he listens to our concerns and addresses them! happy I chose your firm!”

  • Anonymous
    This testimonial was provided by a client of Johnson Brunetti and received no compensation for their statement.

    “I have been pleased with the help and service I have received from the company. I have met several team members on Eric’s team and have found all of them very well prepared to meet with me when reviewing my portfolio. I always feel that I am an important customer and appreciate that very much. I hope the firm continues to focus on the customer and maintains its great service. I think you do a great job for someone like me!!!! I’m happy I chose your firm!”

    Johnson Brunetti
    Welcome to Our New Website!
    Everything was designed with you in mind, making our retirement planning resources more easily accessible to you.
    Check out your new resource center, where everything can be organized by article type or topic
    Are you ready to speak with a financial advisor?
    Johnson Brunetti

    Investment Advisory Services offered through JB Capital, LLC.
    Insurance Products offered through JN Financial, LLC.
    Atlanta • Boston • Hartford | Tel: 800-208-7233

    JB Capital LLC is a federally registered investment adviser under the Investment Advisers Act of 1940. Registration as an investment adviser does not imply any level of skill or training. Information presented is for educational purposes only and is not intended as an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.

    JB Capital's Form ADV | Disclaimer | Privacy Notice | Client Relationship Summary

    *Information about our Affiliation with the UConn Huskies

    Johnson Brunetti is a sponsor of WFSB Better Money, WCVB Better Money Boston, WSB-TV Better Money Atlanta, WTNH Money Wisdom, and WTIC Money Wisdom.