Want to be a 401(k) millionaire? 9 tips all retirees should know.

The average 401(k) balance for American workers age 65 and older hovered around $233,000 in 2022. Not too shabby.

For some, this could be a solid nest egg when combined with other sources of retirement income. But if you’re like me, you’re probably aiming a little higher just to be sure.

Maybe you’ve thought about becoming a millionaire in retirement. More people are achieving this goal with their 401(k)s, and you could be one step closer to joining the 401(k) millionaire club. Here are some 401(k) strategies to consider if your employer offers a plan.

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1. Get ready to crush your financial goals

If your goal is to save $1 million or more for retirement, break it down into simple steps that will keep you excited about your progress and on track. This might include determining how much you want to contribute to your 401(k) each month or year, or setting specific savings milestones along the way. Also, having a plan to tackle other financial goals — like paying off credit card debt or building an emergency fund — can make it easier to set aside money in a 401(k) without getting stuck.

2. Get the 411 on your 401(k).

Read your 401(k) plan documents to be aware of your options, fees and investment rules. It’s also important to look at details like your 401(k) plan’s vesting schedule, which is the time it takes for your employer’s matching contributions to become fully yours. Frankly, it might be a lot harder for you justify contributing dollars to future savings and working toward a seven-figure 401(k) if you have no idea how your plan works.

3. Get the employer match

Your employer’s 401(k) plan could be your ticket to some extra cash for retirement. Many employers offer a 401(k) match, which is essentially free money added to your retirement savings. For example, if your employer matches 50% of your contributions up to 6% of your salary and you earn $100,000 annually, they will get an extra $3,000 if you contribute $6,000 (6% of your salary).

4. Maximize your contributions

Each year, there is a limit to how much you can stash away in your 401(k). For 2024, the contribution limit is $23,000 if you’re under 50, which works out to about $1,917 per month if you contribute equally throughout the year. However, you can also choose to contribute enough to receive full employer match if that’s your goal. Review your finances and long-term goals to find the right balance between hitting your retirement goals and managing your monthly expenses .

5. Don’t be afraid to grow old

If you’re 50 or over and haven’t saved as much as you’d like, you can take advantage of retirement savings benefits such as catch-up contributions. In 2024, the IRS allows you to contribute an additional $7,500 to your 401(k), bringing the maximum contribution to $30,500. The more money you manage to save, the easier it will be to meet your retirement goals.

6. Take advantage of the time

While catch-up contributions can help boost your savings later in life, starting early is one of the easiest ways to reduce the strain on your wallet. With time on your side, you won’t need to contribute as much each month to reach the millionaire figure. Plus, the power of compounding will work in your favor, so those smaller contributions you make early on can continue to grow into a million-dollar nest egg.

7. Live below your means

Contributing hundreds of dollars to your 401(k) twice a month isn’t always easy. But if you can control your income and expenses, it becomes much more doable. Review your expenses to see where you can cut back, and if you increase your income, don’t let your lifestyle creep in and eat up your extra cash.

8. Learn more about your 401(k) investments.

After you decide how much of your paycheck to contribute to your 401(k), the next step is to figure out how to invest that money to help it grow. Your investment options may be limited to a select few funds, such as index funds and target date funds. You’ll want to make sure you choose the right mix of assets based on your age, risk tolerance and goals.

9. Stay there

Investing can be a bumpy ride with the ebbs and flows of the market. Instead of worrying about short-term volatility — which is a normal part of investing — commit to holding it long enough to give your portfolio a chance to reach that million dollars.