Are you aware that there are annual limits on how much you can contribute to your 401(k)?
As of 2018, the 401k contribution limit is $18,500 a year, unless you're over age 50. Individuals age 50 and over are allowed to make an additional “catch-up” payment of $6,000 per year, bringing their annual max allowed contributions to $24,000. If you're in a position to invest the max into your 401(k), the tax breaks can make it extremely worthwhile.
If these amounts just aren't feasible, it's still important for you to start saving for retirement. For example, try starting off small and setting aside five percent of your monthly income into a savings account for several months, and then assess whether it affects your ability to meet your monthly obligations. If not, move the money to an IRA and continue to make regular deposits. Just be sure not to contribute above the IRA contribution limit of $5,500 ($6,500 for those 50 and over).
If your employer offers a 401(k) as part of your employee benefits package, you should be taking advantage of it, especially if they offer some type of matching program. That's essentially free money that you might be leaving on the table, so don't miss out!
Everyone's situation is different
There's a lot of conflicting advice as to how much you should be putting into your 401(k). Some say putting 10 percent aside each year for the entirety of your career should allow you to retire comfortably once you add in Social Security benefits, while others argue that something closer to 15 percent is best.
The fact is, how much you should be saving for retirement is an individual choice, as there are plenty of financial factors to consider. For example, do you have a large amount of credit card debt, student loans, or other financial obligations that you're trying to get under control? Do you have an emergency fund established?
Everyone's situation is unique and there isn't a one-size-fits-all approach as to how much you should be socking away into your 401(k). If you feel that you might need some help when it comes to retirement planning, then consider speaking with a qualified financial advisor who can help.