A 401(k) can combine employee contributions, employer contributions, tax advantages, and long-term investment growth. The amount available at retirement depends on contribution history, investment performance, fees, plan rules, withdrawals, and taxes.
Key points
- Capture the employer match when it fits your situation
- Know the annual IRS contribution limits
- Review vesting rules for employer money
- Choose an asset allocation you understand
- Track fees and investment options
- Coordinate 401(k) savings with IRA and taxable accounts
How this fits into retirement planning
For 2026, the IRS announced an employee elective-deferral limit of $24,500 for most 401(k), 403(b), governmental 457 plans, and the federal Thrift Savings Plan, before applicable catch-up provisions.
Official sources
Use current guidance from the Social Security Administration at ssa.gov and the Internal Revenue Service at irs.gov for rules that apply to your situation.