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How to max out your retirement savings

Key takeaways

  • Saving for the future in tax-advantaged accounts can help your money grow without worrying about taxes reducing the amount available for investing and compounding.
  • If you're able to, consider these steps for maxing out the retirement saving options you may have available.

Saving and investing as much as possible during your working years can give you options later in life. You may decide you'd like to retire early, switch careers, or your health or that of a loved one could make the decision for you. Maxing out your retirement savings can help set you up for success later in life. Here are some suggestions on how to max out your 401(k) and other retirement savings accounts.

1. Consider contributing to your workplace retirement account up to the employer match

If you have a retirement plan through an employer—for example, a 401(k) or 403(b)—find out if your employer has a "match," which means they'll match your contributions up to a certain amount each year. This amount might be a percentage of your contributions, a percentage of your salary, or a certain dollar amount.

Once you find out their policy, do the math to understand how much you'd need to contribute to reach the maximum employer match. That's like free money! Fidelity believes you should contribute at least enough to your employer's plan to receive the full match.

Next, find out how long you need to work there to keep the money they give you (often called "vesting"). But once that money vests, it's yours.

FAQ: Should I contribute to a traditional 401(k) or Roth 401(k)? Both have benefits, but picking one and contributing is what's most important. You can even split your contributions between the two.

2. Consider contributing the maximum amount to your health savings account (HSA)

Plan to save additionally—and separately—for health care costs in retirement. Consider using an HSA if you are enrolled in an HSA-eligible health plan. With an HSA, you can often split your contributions into invested money (which can be used for long-term savings for health care costs in retirement) and cash (so you can pay for your qualified medical expenses directly from your account). You can get 3 tax benefits for contributions: an initial tax deduction for your contributions, tax-free potential earnings, and tax-free withdrawals when you use the money for qualified medical expenses.1

Find out how much you can contribute and, if you can, try to reach that limit (for 2023, it's $3,850 for individuals or $7,750 for families; those 55 and older can contribute an additional $1,000 as a catch-up contribution). Once the money is in your account, don't forget to choose your investments—investing is how your money has the potential to grow over time. This is particularly important to think about for women, who have higher health care costs in retirement and are more likely to need long-term care.2

FAQ: What if I want to spend the money in my HSA on expenses right now? Consider talking to a financial professional about how to balance what you need right now versus saving for the future.


Remember that you will need to elect where your contributions are invested. Review your plan documents to see what options are available to invest your savings.

3. Consider contributing the allowed maximum to your workplace savings plan

If you've contributed up to the employer match, you may be ready to save more for retirement. Consider maxing out your 401(k).

In 2024, you can contribute up to $23,000 pre-tax to your 401(k). If you're at least age 50 at the end of the calendar year, you can add a catch-up contribution of $7,500 pre-tax.

Fidelity believes in aiming for 15% of your pre-tax salary (including your employer's contributions). If you can't afford the 15%, figure out what you can afford, then you can always increase it whenever you get a raise or promotion.

FAQ: What if my employer has a profit-sharing program that goes into my 401(k)? There is a limit to how much you and your employer can contribute in total into your retirement accounts each year. If, for example, your employer has a profit-sharing program that gives you significant 401(k) contributions, it could be possible for your personal yearly maximum to be lower than $22,500/$30,000 (if you are 50+). That's because your employer will have used some of the combined total, which, in 2023, is $66,000 in total employee and employer contributions. If you are age 50 or older, however, the additional $7,500 is not reduced by employer contributions.

4. Consider contributing the maximum to an IRA (a Roth IRA, traditional IRA, and/or a rollover IRA)

Another retirement savings option is an individual retirement account (IRA). These are not connected to an employer, and you can contribute in addition to your employer's plan.3

There are several IRA options, with different benefits and requirements. You can contribute to one or even all of those options, as long as your combined contributions don't go beyond either your earned income or what the IRS allows. (For 2023, it's $6,500, or $7,500 if you are 50+.)

FAQ: How do I choose an IRA? It depends on what you're looking for, but there are a few ways to narrow it down. A rollover IRA is where you can move your old workplace plans, but you can also contribute to it yourself once it's set up. A Roth IRA and traditional IRA are quite different from each other, so you might want to check out this handy comparison chart.

5. Add after-tax money to your 401(k)

Your employer might allow you to add after-tax money into your 401(k)—if so, you can contribute beyond your $22,500/$30,000 (50+) individual limit and go up to the 2023 combined employer and employee limits of $66,000/$73,500 (50+).

There are several potential strategies for what to do with after-tax 401(k) contributions, including converting that money into a Roth 401(k) after it's in the account. If you are considering this option, consider talking to a financial professional.

FAQ: Can I access this money once it's in my retirement account? Yes—after-tax contributions can be withdrawn without taxes or penalties at any time.

6. Consider investing in brokerage accounts

Great—you've maximized your contributions to tax-advantaged retirement accounts! You can keep saving and investing in regular brokerage accounts. The tax advantages won't be the same, but you'll still have the potential for long-term growth, not to mention flexible access to the money if you need it. And there's no limit to how much you can invest, so you can keep moving toward the future of your dreams.

How do you choose how and where to invest? A good first decision point is whether you want to choose and manage your own investments or whether you want a professional to do it for you.

Want to do it yourself? Use our step-by-step guide to choosing and managing your own investments.

Want a professional to choose and manage your investments? We have a wide range of professionally managed options to choose from, including accounts with $0 advisory fees (subject to asset limits) and no minimum balances, all the way up to dedicated advisors.

FAQ: Is investing outside of retirement risky? There are a wide range of ways to invest, including some that are more aggressive and some that are lower risk. It's smart to make sure you invest based on what makes you comfortable, for the long term, and that you are diversified (have a range of investments so that all of your eggs aren't in one basket).

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Fidelity does not provide legal or tax advice, and the information provided is general in nature and should not be considered legal or tax advice. Consult an attorney, tax professional, or other advisor regarding your specific legal or tax situation.

1. With respect to federal taxation only. Contributions, investment earnings, and distributions may or may not be subject to state taxation. Spending HSA money is tax-free when used to pay for qualified medical expenses. 2. Fidelity Investments 22nd annual Retiree Health Care Cost Estimate, June 2023 3. The amount you may be able to deduct for a contribution may be reduced by the fact that you are already covered by an employer's plan. For more information, check the IRS website or Publication 590-A for contribution limits and limitations on deductibility.

Fidelity Go® provides discretionary investment management, and in certain circumstances, non-discretionary financial planning, for a fee. Advisory services offered by Fidelity Personal and Workplace Advisors LLC (FPWA), a registered investment adviser. Discretionary portfolio management services provided by Strategic Advisers LLC (Strategic Advisers), a registered investment adviser. Brokerage services provided by Fidelity Brokerage Services LLC (FBS), and custodial and related services provided by National Financial Services LLC (NFS), each a member NYSE and SIPC. FPWA, Strategic Advisers, FBS and NFS are Fidelity Investments companies.

Diversification and asset allocation do not ensure a profit or guarantee against loss.

As with all your investments through Fidelity, you must make your own determination whether an investment in any particular security or securities is consistent with your investment objectives, risk tolerance, financial situation, and evaluation of the security. Fidelity is not recommending or endorsing this investment by making it available to its customers.

Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.

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