I didn’t start by maxing it out. I started with the match, increased my contributions as my income grew, and slowly turned a pretty boring account into the foundation of my plan to retire at 55.
In my last post, Retirement Isn’t One Account. It’s a Strategy., I wrote about a change in how I think about retirement.
I stopped looking at all of my retirement savings as one giant pile of money.
Instead, I started asking:
What job does each account need to do?
I originally thought I’d explain my entire retirement strategy in one post.
Then I started writing it.
There was way too much to talk about.
So instead, I’m going account by account.
And I’m starting with the obvious one.
My 401(k).
Today, my 401(k) has a very specific job:
It’s the core of my retirement savings.
At 35, I had $10,740 in this account.
At 40, I have more than $107,000.
Here’s what happened in between.
What Is a 401(k) and How Does It Work?
A 401(k) is a retirement plan offered through an employer.
You choose how much of your paycheck you want to contribute, and that money goes into your account.
But here’s an important distinction:
Putting money into a 401(k) isn’t the same thing as investing it.
The money inside the account generally needs to be invested in one or more of the options available through your employer’s plan.
Those might include target-date funds, stock funds, bond funds, and other investments.
There are also different tax treatments.
With a Traditional 401(k), contributions are generally made pre-tax for federal income tax purposes, and you’ll generally pay income tax when you withdraw the money later.
Some employers also offer a Roth 401(k). You contribute after-tax money, but qualified withdrawals can generally be tax-free.
And then there’s the feature that originally got me interested:
the employer match.
I Started With the Employer Match
When I first started contributing, I wasn’t thinking about FIRE.
I wasn’t running retirement projections.
And I definitely wasn’t calculating how I would access my money at 55.
My strategy was much simpler.
I wanted the employer match.
If I contributed to my retirement and my employer was willing to contribute additional money too, I wanted that money.
So that’s where I started.
I didn’t max out my 401(k).
I didn’t have some amazing savings rate.
I contributed enough to focus on the match and kept going.
Looking back, I’m glad I did.
Because those early dollars got something the money I’m contributing today can never get back:
Time.
From $10,740 to $107,417
While writing this post, I pulled my old 401(k) statements.
Honestly, I think the numbers tell this story better than I can.
2021: $10,740
2022: $17,519
2023: $28,904
2024: $63,077
2025: $89,022
August 2026: $107,417
At the end of 2021, when I was 35, I had a little over $10,000 in this 401(k).
Today, at 40, it’s over $107,000.
That’s almost 10 times the balance I had less than five years ago.
I think the starting number is actually the more important one.
It’s easy to read personal finance blogs and assume everyone who’s serious about retirement started aggressively investing at 22.
I didn’t.
At 35, I wasn’t sitting on some massive 401(k).
I had $10,740.
And when I look at that number now, I don’t think:
Wow. I was behind.
I think:
I’m really glad I kept going.
But My $10,000 Didn’t Magically Turn Into $107,000
This is important context.
The stock market didn’t magically turn $10,740 into $107,417.
I kept putting money in.
My employer put money in.
My investments had time to grow.
And there’s another huge part of the story:
My income grew too.
When I started this chapter of my career in April 2020, my base salary was $68,000, with a 5% annual bonus.
Then my compensation started moving pretty quickly.
April 2020 — $68,000 + 5% bonus
October 2021 — $85,000 + 10% bonus
September 2022 — $108,000 + 10% bonus
April 2024 — $120,000 + 15% bonus
March 2025 — $122,000 + 15% bonus
March 2026 — $138,000 + 15% bonus
My base salary has more than doubled since 2020.
That matters.
When I was earning $68,000, I couldn’t save for retirement the same way I can while earning $138,000.
So I didn’t.
I started with what I could do at the time.
As my career progressed and my income increased, I had more room to contribute.
And seeing my 401(k) balance grow made me want to contribute more too.
My Income and Retirement Savings Grew Together
When I put the two timelines next to each other, I can see what happened pretty clearly.
2021 — salary increased to $85K → $10,740 401(k)
2022 — salary increased to $108K → $17,519 401(k)
2023 — $108K salary → $28,904 401(k)
2024 — salary increased to $120K → $63,077 401(k)
2025 — $122K salary → $89,022 401(k)
2026 — salary increased to $138K → $107,417 401(k) so far
These aren’t perfect apples-to-apples comparisons.
My raises happened at different times during the year, and my 401(k) balance reflects contributions, employer money, investment performance, and other account activity.
But the overall trend is pretty obvious.
As my earning power increased, so did my ability to build retirement savings.
I think that’s important because someone earning $68,000 shouldn’t look at what I’m able to save today at $138,000 and feel like they’re doing something wrong.
I couldn’t save like my current self either.
I just needed to start.
Then, when I earned more, I needed to make sure at least some of that additional income made its way toward my future.
That doesn’t mean every raise went into my 401(k).
Definitely not.
My lifestyle improved too.
I earn more today, and I spend more today.
But a raise doesn’t have to mean:
Spend all of it.
And it doesn’t have to mean:
Save all of it.
For me, it’s somewhere in between.
I can improve my life today while also using some of my higher income to buy something I care about even more:
more freedom later.
The Employer Match Still Matters
The employer contribution that originally got me started is still part of the equation.
My 2026 numbers are a good example.
Between January 1 and August 7, I personally contributed $5,076.66.
My employer contributed another $2,382.83.
That’s more than $2,300 added to my retirement account on top of what I contributed myself.
And that money gets the opportunity to remain invested too.
That’s why I still pay attention to the employer contribution.
It’s not just what I’m putting away. It’s what the entire compensation package is helping me build.
My Journey Hasn’t Been Perfect Either
There’s another detail in my old statements that I could conveniently leave out.
I borrowed from my 401(k).
In 2023, I took a $10,000 401(k) loan.
So no, this isn’t one of those stories where I made every financially optimal decision, never touched the account, maxed everything out, and arrived at 40 with a perfectly executed retirement strategy.
That’s not what happened.
My financial priorities changed.
My income changed.
My decisions changed.
And my understanding of retirement changed.
I’m not sharing the loan because I think everyone should borrow from their 401(k).
I’m sharing it because:
My retirement journey hasn’t been a perfectly optimized straight line.
There have been detours.
The important part is that I kept going.
What Is the 401(k) Contribution Limit for 2026?
There is a limit to how much employees can contribute to a 401(k).
For 2026, the employee contribution limit is $24,500.
People who meet certain age requirements can potentially make additional catch-up contributions.
But I don’t look at that $24,500 number as some kind of pass-or-fail test.
Maxing out a 401(k) isn’t the only way to make progress.
I’m proof of that.
I certainly didn’t start by maxing mine out.
My progression was much simpler:
Start with the employer match.
Keep contributing.
Increase when I can.
Adjust when life requires it.
Then increase again when I have more room.
My 401(k) Doesn’t Need to Do Everything
This goes back to the idea from my last post.
Every account has a job.
My 401(k) doesn’t need to solve every financial problem between now and the end of my life.
It just needs to do its job.
For me, that’s becoming the core of my long-term retirement savings.
I’m not treating it like an emergency fund.
I’m not planning vacations around it.
I’m not mentally spending it on things I want today.
I have other accounts for other purposes.
The 401(k) gets something different:
Time.
As much uninterrupted time as I can reasonably give it.
Can I Use My 401(k) If I Retire at 55?
There’s one obvious complication.
I’m not planning to work until my 60s.
My target is 55.
Normally, taking money from a 401(k) before age 59½ can potentially trigger an additional 10% tax unless an exception applies.
And there happens to be an exception that’s particularly interesting to me.
It’s commonly called the Rule of 55.
In general, if you separate from your employer during or after the calendar year you turn 55, distributions from that qualifying workplace retirement plan may avoid the additional 10% early-distribution tax.
The timing matters, and this particular exception applies to qualifying workplace retirement plans — not IRAs.
There are other details I’ll need to consider, including the rules of whatever employer plan I have when I eventually retire.
And I’m still 15 years away.
A lot can change in 15 years.
So I’m not building my entire retirement plan around one tax rule staying exactly the same.
But my target retirement age happens to be 55.
Of course I’m paying attention to it.
I’m 40. Now I Have 15 Years to See What This Can Become.
At 35:
$10,740.
At 40:
$107,417.
Now I have roughly another 15 years until my target retirement age.
I don’t know what the market will return.
I don’t know exactly what I’ll earn over the next 15 years.
And I don’t know what my contribution rate will be every year.
But I know what I can control.
Keep contributing.
Keep investing.
Take advantage of employer contributions.
Increase contributions when my finances allow it.
Adjust when life requires it.
And give the money time.
That’s the job right now.
Keep building the foundation.
What I’m Learning
When I look back at my old statements, the $107,000 balance isn’t actually the number I find most interesting.
It’s the $10,740.
Because that’s where I was at 35.
I wasn’t maxing out my 401(k).
My salary was much lower than it is today.
I hadn’t perfectly mapped out retirement.
I even borrowed from the account along the way.
But I kept contributing.
My career progressed.
My income increased.
I increased what I could save.
My employer contributed.
My investments had time to grow.
And somewhere along the way, retiring at 55 stopped feeling like some vague idea and became something I could actually start planning for.
That’s my 401(k) strategy.
Not perfection.
Start. Keep going. Increase when I can.
My 401(k) is building the foundation.
The other accounts I’m building have different jobs.
What’s Next
Next up: another account.
I’m going to continue this series one account at a time instead of trying to squeeze my entire retirement strategy into one giant post.
I’ll explain what each account actually is, how I use mine, what I’ve learned, and most importantly:
What job have I given this money in my plan to retire at 55?
Because retirement isn’t just about accumulating as much money as possible.
It’s about making sure the money I’m accumulating is in the right places when I actually need it.
This is part of my personal journey toward retiring at 55. I’m sharing what I’m doing and learning along the way — not giving financial advice.