A Guide to 401(k) Plans

Consider these strategies to get the most out of your savings.

- By Emma Patch

IF YOUR EMPLOYER OFFERS a 401(k) plan, it’s your primary ticket to a comfortable, secure retirement. There are limits on how much you can contribute, but they’re generous. In 2022, you can save up to $20,500 in your 401(k) plan, up from $19,500 in 2021. (Workers age 50 or older can put in an additional $6,500.) And contributions are deducted from taxable income, so you get even more bang from your bucks.

When you’re just starting out, maxing out your contribution can be a challenge. The general rule of thumb when it comes to saving in your 401(k) is to try to contribute 12% to 15% of your gross income. If that’s too much, resolve to put in at least enough to qualify for your company’s matching contributions.