Maxing out your 401(k) has never been so challenging. In 2025, those under 50 would have to set aside $23,500 to pull it off. Those 50 to 59 and 64 and up are allowed to contribute up to $31,000. And for the first time this year, adults ages 60 to 63 by the end of the year can contribute up to $34,750. That’s a tall order for all but the wealthiest Americans.

Don’t feel discouraged if you won’t get anywhere close to that this year. You may still be able to retire comfortably on a lot less.

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How much do you actually need to retire?

Everyone will need a different amount for retirement. The right answer for you depends on when you plan to retire, your life expectancy, and your lifestyle. Some people may be able to get by on less than $1 million while others will need $2 million or more.

One common strategy for estimating your retirement needs is to multiply your expected annual retirement expenses, minus your expected annual Social Security benefits, by 25. The result is supposed to tell you how much you need to cover 30 years of retirement expenses. But again, this is just an estimate. If you plan to make a lot of big-ticket purchases or you expect your retirement to last longer than 30 years, you might need to save more.

You can also use a retirement calculator if you want a more personalized estimate of your savings goals. However, you still may need to factor in a little extra if you plan to make any big-ticket purchases.

A retirement calculator can also help you estimate how much you need to save monthly to reach your goal, which is helpful in figuring out if you actually need to max out your 401(k) this year. For a lot of people, it’s possible to reach your goal without diverting $20,000 or more for retirement in 2025.

How much will your 401(k) contributions be worth by retirement?

It’s normal to think your 401(k) contributions today seem small, especially given the high contribution limits these accounts offer. But even small contributions can be valuable, especially if you have a few decades until retirement.

Let’s say you can only save $500 per month. That’s a total of $6,000 per year. If you did this over 10 years, that’d be a total of $60,000 in personal contributions. But if you earned an 8% average annual return on those funds, you’d actually have close to $87,000. If you kept this up over 20 years, you’d have nearly $275,000 in savings. And after 30 years, you’re getting close to $680,000, despite only setting aside $180,000 of your own money.

We haven’t even talked about 401(k) matching contributions yet. Let’s say your employer gave you a $3,000 match when you put $6,000 into your 401(k). With an 8% average annual rate of return, your employer-matched funds alone would be worth close to $340,000 after 30 years. Combined with personal contributions, that puts you over $1 million.

What if you got a late start on retirement savings?

Those who got a late start on retirement savings will have a more difficult road. With less time until retirement, you’ll have fewer investment earnings to rely upon and that means you’ll need to make larger personal contributions. You may even need to max out your 401(k) to get close to your goal.

Obviously, a lot of people who need to max out their 401(k) to retire comfortably lack the income to do so. So you may have to explore other options like delaying retirement or continuing to work part-time throughout retirement to make ends meet.

However, don’t let that stop you from putting some money in your 401(k) if you’re able to do so. Try to contribute at least enough to get any employer match you qualify for so you don’t miss out on these extra funds for your retirement.

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