How I Maxed Out My 401k in 6 Months

Humblebrag, I have maxed out my 401k for 2018 and I want to help you contribute more to yours.

Side note: I actually have a 403b because I work for a not for profit organization. Most people in the US have 401K’s not 403b’s, but these two accounts essentially have the same kick ass tax-saving benefits and vary by employer.

I started out 2018 with a mindset that I was going to financially accomplish more in these 365 days than ever before. With that mindset, I needed to establish financial goals for this year, because if you don’t have a target then what are you aiming for.

My top financial goal for 2018 was to maximize contributions to my 403b and as of July, I am proud to say, “mission accomplished.” I was able to max out this account in record time* and I want to share with you how I did this.

*Some employers require you to spread your 401k contributions over the full 12 months to collect the employer match. This was not the case for my employer. Please check with your employer to see what is the best fit for you.  

Great News 401k Savers

According to Fidelity, which has 6.8 Trillion Dollars of managed assets, as of December 31st, 2017, the average 401k balance has crossed the $100,000 mark for the first time in history. While these accounts have grown in large part to the rising stock market, investors have been contributing more money to their accounts as well.

What should you aim for, savings-wise? Fidelity has some pretty concrete ideas. By the time you’re 30, the company calculates you should have saved half of your annual salary. If you make $50,000 on your 30th birthday, you should have $25,000 banked for retirement. By age 40, you should have twice your annual salary. By age 50, four times your salary; by age 60, six times, and by age 67, eight times. If you reach 67 years old and are making $75,000 per year, you should have $600,000

What’s wrong with this very general rule of thumb provided by Fidelity and quoted by The problem lies in the last couple of sentences.

Following the *4% rule, $600,000 of retirement savings at age 67 would provide an annual income of $24,000 in retirement. Now, to live on $24,000 in the US you have to have some pretty low expenses. You need to probably have a paid off house and no auto loan.

*  The 4% rule is a general rule of thumb that says you can use 4% of any lump sum of money and reasonably expect that money to last 30 plus years.

$600,000 X 0.04 = $24,000

My speculation is that Fidelity is counting on some sort of social security to subsidize this $600,000 in retirement savings. This is the issue I have. There are no guarantees with social security.

It is estimated that in 2037, Social Security will be paying out more money than it is taking in. Social Security is not legally permitted to borrow money. At the point that Social Security owes more money than is collected in taxes, Congress will have to change laws to fix social security. Does this sound like something you want to count on as a source of retirement money?

For my retirement calculations, I am relying only on money I have saved during my working years. That is something I can count on. I know I can rely on myself.

If you already max out your 401k, click here to read my post on why you need a Roth IRA.

Here are 3 steps I used to max out my 403b in 6 months

I have 3 actionable tips for you to increase your 401k contributions because this would be just a, “hey look how awesome I am” post without giving you some action items to help increase your savings.

Bank your raise via auto escalate

If it has been many months or even years since you have logged into your 401k, you should probably go have a look. New features and updated mutual funds change all the time.

One newer feature you should definitely use is auto-escalate. It is a, set it and forget it feature, that automatically increases your contribution by 1 or 2 percent every year. This serves the purpose to capture your raise or increase in salary every year before that money can creep its way into your lifestyle.

If your 401k does not have an auto escalate feature don’t fret, this is what I do.

If I get a 1 dollar raise and I work 80 hours per 2 week pay period that would be $80 extra dollars per payday.

$80 X $1 =$80

Now you log into your 401k and increase your contribution by $80 every 2 weeks. You have now banked your raise. You have defeated lifestyle creep. This is money you won’t miss because you have never had it to spend.

By simply banking your raise you have increased your annual contribution to your 401k by $2080. If you bank your raise for several years, you are well on your way to maxing out your 401k.

Mindful spending

Increase your 401k contribution by practicing mindful spending. This is one area our family really struggles with. If you are like our family, budgets can be difficult to follow. Try this tip. Create a budget for only one area of your spending, like groceries or entertainment. Try to attack the biggest spending category in your budget to get the biggest benefit. For our family, that category is groceries. We have had success setting a $250 weekly budget for groceries and eating out. We have had smaller success with no spend days as a way to cut down on trips to the grocery store and impulse purchases.

Increase your income

Here is my favorite way to increase my 403b contribution. Work overtime at my day job. This was the biggest contributor to my success at maxing out so early in 2018. During the cold winter months here in the Pacific Northwest, I set my 403b contribution rate to 45% and started working my ass off.  I was able to chip away at the $18,500 contribution limit for 2018 with swift fashion.

I understand that not everyone can work extra hours at their job. This is where a side hustle is perfect for earning some extra cash that you can defer right into your tax-advantaged savings account.

Here are 3 other must-read posts with a ton of information that share similar 401k ideas.

How to Save $50,000 Per Year in Your Tax-Advantaged Accounts– Retire by 40

401(k) Mistakes You Didn’t Know You Were Making – The Balance

How To Save More For Retirement If You Don’t Make Much Money – Financial Samurai


With these three tools, mindful spending, bank your raise and increase your income, you will be on your way to saving more into your 401k.

Don’t count on anyone but yourself to financially support you and your lifestyle in retirement. Hard work and hustle during your youthful working years will set you up for success down the road.

Maxing out my 403b in 6 months was not typical or customary. I worked my tail off and took difficult steps to get to a place where I could divert almost half of my pay, for several months, to a retirement account.

This worked for me, but there is no one size fits all solution to retirement. What I do know, is that there is always room for improvement in our life. Take that breakthrough step towards a better life by increasing your savings rate by just 1% and your future self will thank you.


What steps have you taken in 2018 to increase your 401k contributions? Are you contributing enough to capture your employer match?

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9 thoughts on “How I Maxed Out My 401k in 6 Months

  1. You do have to be careful, the way the matching contributions works on some retirement plans you should only get doc months worth of match. Crazy but true, mine worked that way.

  2. Well done!! I’m hopefully going to have access to a 401k for the first time before the year is out and I am SO excited!

    Not sure I’d take Financial Samurai’s advice on low income savings though, because I’m pretty sure he thinks that’s anyone making under $300k 😂

    1. That is great news, Angela. The 401k system in America started from a tax loophole. The system has many flaws and one of the biggest is that not everyone has access. To top that off some who have 401k’s, have subpar, high fee funds, that bilk Americans out of their hard-earned money.

  3. Awesome! At my last job, I frontloaded mine, maxing it out in February. My husband’s employer matches each paycheck, so he prefers to contribute evenly throughout the year. I like to check things off as soon as possible, so frontloading works better for me.

  4. Wow that’s pretty amazing! I’m hoping I’m able to max it out mines through out the year in the future. There’s too many things at the moment that requires me to budget tightly which is why I always try to bring in more income.

    1. It takes time to get to the point of maxing out retirement accounts, like the 401k. Milestones in life like marriage, buying your first house and having children are expensive. It has only been the last couple of years that our family has had the income to max out these accounts. After increasing income, banking your raises is my favorite mental head game to increase savings. Thank you so much, Melanie, for stopping by and reading my post.

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