Most people aren’t financial experts or market wizards. It’s not that they can’t learn; they just have other things going on between kids, a career, hobbies, and more. My day-to-day responsibilities also leave me with little time to manage my nest egg.

But I’m still using a 401(k) plan to build my dream retirement. Investing in a 401(k) allows me to live life and smell the flowers while setting myself up to hopefully retire as a millionaire.

The 401(k) has slowly replaced the pension as the average worker’s primary retirement plan. Approximately 70 million people actively participate in their employer’s 401(k) plan today, and millions more have already retired on their 401(k)s.

Below, I’ve outlined my path to retire as a 401(k) millionaire with ideas and tips that may help you achieve your dream retirement as well.

1. I’m taking advantage of the high contribution limits 401(k) plans offer

There are many retirement planning strategies, each with pros and cons. However, the 401(k)’s relatively high contribution limits are the No. 1 factor that won me over.

Why? Because it lets me control my financial destiny by allowing me to save aggressively. And because traditional 401(k) plans are tax-deferred retirement accounts, contributing to them lowers my annual taxable income as well.

For 2025, most individuals can contribute (pre-tax) up to $23,500. However, additional catch-up contributions for older individuals (at least 50) allow them contribute up to $34,750. Other factors, such as a 401(k) company match, can boost total contribution limits to between $70,000 and $81,250.

Meanwhile, another popular retirement account like the Roth IRA has annual contributions capped at just $7,000 ($8,000 for those 50 and older).

And you don’t need to max out your 401(k) to retire a millionaire. But focusing on the amount I save rather than how fast it grows helps me avoid taking unnecessary risks with my nest egg. It also motivates me to contribute more.

2. The 401(k) match is a must-have for me and should be for you, too

Many employers that offer 401(k) plans also offer matching contributions as a financial incentive to get their workers saving.

Employers will typically add to your contributions using a specified ratio and limit. For example, a company’s match might be dollar for dollar up to a maximum of 5% of your salary. Suppose someone working at that company makes $100,000 and contributes 5% to get the maximum match.

In that scenario, the person would contribute $5,000 from their pre-tax wages, and the company would add $5,000 on top of that. Therefore, total contributions to the 401(k) for the year would be $10,000. This is about as close to free money as you’ll find. Some employers require a vesting period for their matching contributions to prevent job-hopping, but it’s typically the only string attached to this money.

3. My 401(k) helps protect me from my ego and bad decisions

Before I leaned into my 401(k) plan, I also used a Roth IRA with funds from a previous job. A Roth IRA often allows you to hold more types of assets, including individual stocks. During the stock market bubble in 2021, I started buying and selling stocks with my nest egg like a day trader. Eventually, I grew too confident and had too much money in an individual stock that didn’t work out. My Roth IRA suffered steep losses and hasn’t recovered.

My retirement strategy should never have involved taking such big risks with my savings, but fear and greed are powerful emotions. When the stock market swings to extreme highs and lows, it can tempt investors into costly mistakes. I learned from mine, which put me on my current path.

It has also helped me appreciate the simplicity of the 401(k). Most 401(k) plans focus on mutual funds and target date funds, so it’s harder to take on excessive risk. I don’t think I would make the same mistake again, but it’s comforting to know my 401(k) won’t even give me the chance to find out.

Hopefully, my experiences and ideas for how to retire as a 401(k) millionaire help you triumph in your journey as well.

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