You should minimally put in 5% so you get your match. The typically rule of thumb when saving for retirement is to save about 15%. Maxing out your 401k would be wonderful, but that's going to be close to a third of your pay before taxes, and would probably be a hardship.
It's very low. On average decent companies match 50% of contributions up to 3-6%. Some 100% up to 6-7% but that's considered very good. 20% doesn't sound right. Also some companies offer no match at all.
In this case, a good rule of thumb that still has a profound positive impact on your retirement savings is to contribute just enough to receive the full employer match. So if your employer will match up to 7% of your contributions, only contribute 7% so you can take full advantage of that extra money.
The sustainable withdrawal rate is the estimated percentage of savings you're able to withdraw each year throughout retirement without running out of money. As an estimate, aim to withdraw no more than 4% to 5% of your savings in the first year of retirement, then adjust that amount every year for inflation.
In other words, like any other investment, 401(k)s do have plenty of risk associated with them. Saving between 10% and 20% of your gross salary toward retirement is a general rule of thumb to follow, but everyone's situation is different.
New research indicates that a 5% withdrawal rate is “safe”— although how you invest and tap your portfolio is critical to keep the cash flowing. Investors have been conditioned for decades to believe they can withdraw only 4% a year through a theoretical 30-year retirement, adjusted for inflation.
Take advantage of company matching
Say your employer will match up to 6% of your salary. You should aim to contribute at least that much, if you can, to take full advantage of the employer match benefit.
According to the $1,000 per month rule, retirees can receive $1,000 per month if they withdraw 5% annually for every $240,000 they have set aside. For example, if you aim to take out $2,000 per month, you'll need to set aside $480,000.
One of those tools is known as the Rule 72. For example, let's say you have saved $50,000 and your 401(k) holdings historically has a rate of return of 8%. 72 divided by 8 equals 9 years until your investment is estimated to double to $100,000.
A 5% match for your 401(k) means your employer is offering a 100% match on all your contributions each year, up to a maximum of 5% of your annual income.
Unlike a traditional IRA or a traditional 401(k), the Roth IRA is one of the few tax-advantaged accounts that allows you to withdraw the money you've contributed at any time for any reason without paying taxes or penalties.
A study by Vanguard reported that the average employer match was 4.5% in 2020, with the median at 3% of salary. In 2023, if you're getting at least 4% to 6% in 401k employer matching, it's considered a “good” 401k match. Anything above 6% would be considered “great”.
If you have $400,000 in the bank you can retire early at age 62, but it will be tight. The good news is that if you can keep working for just five more years, you are on track for a potentially quite comfortable retirement by full retirement age.
“By the time you hit 33 years old, you should have $100,000 saved somewhere,” he said, urging viewers that they can accomplish this goal. “Save 20 percent of your paycheck and let the market grow at 5% to 7% per year,” O'Leary said in the video.
For many people, $1 million is enough to retire. But whether it will be enough for you depends on several factors, including your anticipated lifestyle, your estimated healthcare costs, inflation, and how long you expect to live.
Aim for 15%
According to Fidelity, investors should aim to save 15% of their pre-tax income annually, including any match. 1 A common rule of thumb is to set aside at least 10% of your gross earnings.
Employer match program.
Google will match 50% of your 401(k) contributions up to the pre-tax/Roth contribution limit. As of 2025, an employee can contribute up to $23,500 in pre-tax/Roth dollars. That means Google can add up to $11,750 in matching contributions to your account, if you contribute the maximum.
There are guidelines to help you set one if you're looking for a single number to be your retirement nest egg goal. Some advisors recommend saving 12 times your annual salary. 12 A 66-year-old $100,000-per-year earner would need $1.2 million at retirement under this rule.
The Only Way to Safely Implement the 7% Rule
A GLWB allows you to withdraw up to 7% of your annuity's value annually, ensuring you receive income for life, even if the annuity's balance is exhausted.
How about this instead—the 50/15/5 rule? It's our simple guideline for saving and spending: Aim to allocate no more than 50% of take-home pay to essential expenses, save 15% of pretax income for retirement savings, and keep 5% of take-home pay for short-term savings.
The 5x5 rule states that if you come across an issue take a moment to think whether or not it will matter in 5 years. If it won't, don't spend more than 5 minutes stressing out about it. When your problems need to be put into perspective, the 5x5 rule is a good thing to remember.