The IRS increased the 2026 annual contribution limit for 401(k) plans to $24,500, up from $23,500 in 2025. Only 14% of Vanguard-run defined contribution plan participants maxed out their accounts in 2024, with high-income earners more likely to reach this goal.

Most Americans are under-saving for retirement, with just over one-third feeling on track in 2023. Despite this, diligent savers are striving to max out their 401(k) accounts, aiming for a more secure retirement through compound interest and employer matching funds.

Starting early and maximizing contributions can lead to significant wealth accumulation. Even modest earners can benefit from reaching the annual maximum, especially considering the uncertainty surrounding Social Security and retirement savings adequacy.

Taking advantage of employer matches, automatic contributions, and budgeting can help individuals get closer to maximizing their retirement savings. Balancing financial goals and considering tax-efficient strategies can provide financial flexibility in retirement.

Read more at Yahoo Finance: Why Only 14% of Workers Achieve This 401(k) Goal and Why You Should Aim for It