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It’s an honor to be asked to be a member of a friend’s or family member’s wedding, but it also comes with a cost. Between buying/renting attire, attending prewedding events, and purchasing gifts, it can run around $1,650 to be a bridesmaid and $1,600 to be a groomsman.

Just one wedding can take a bite out of your budget, not to mention the familiar scenario of attending several weddings in one year. We’ll help you understand the expenses that go into being a part of the big day so you can prepare and budget well in advance.

How Much Does It Cost to Be a Bridesmaid?

While the average bridesmaid may spend $1,650 to be a part of the bridal party, costs vary significantly depending on the location of the wedding, number of events, and dress code. Before you agree to participate as a bridesmaid (or maid of honor), it’s important to consider what costs you may be responsible for.

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The Dress

Etiquette dictates that bridesmaids cover the cost of their dress, shoes, and any accessories the bride has selected for them to wear. According to The Knot’s 2025 Real Weddings Study (which surveyed nearly 17,000 couples who wed in 2024), the average bridesmaid dress costs $128 per person.

You’ll likely also be responsible for any alterations, which can run from $75 to $150, depending on what adjustments are needed. While there are ways you can save — such as renting a dress — that decision is often not up to the bridesmaid.

Recommended: 2026 Wedding Cost Calculator with Examples

Hair and Makeup

Traditionally, if the bride requests that everyone in the party have their hair and makeup done in a certain style, she will cover the cost. If, on the other hand, bridesmaids are given the option to opt in or do their own thing, the bridesmaids generally cover the cost of getting glammed up for the big day. The average cost of wedding hair for bridesmaids is $100, and you can tack on another $100 for makeup.

Bachelorette Party

Bachelorette parties have become more elaborate in recent years. Typically, every attendant pays for their own expenses, while also splitting the cost to cover most, or all, of the bride’s expenses.

According to The Knot, the average cost of a bachelorette party in 2023 was $1,300 per person. Of course, the cost of attending a bachelorette party varies significantly depending on the type, location, and length of the event. Celebrations that last one to two days cost, on average, $1,135 per attendee, while those that go on for three to four days can total $1,630 each. Also, the farther you need to travel to the event, the more you’ll need to spend. Guests who travel to the bachelorette party locale by plane spend an average of $2,000, while those who travel by personal car spend an average of $900 to attend the event.

Wedding Travel and Accommodations

For the wedding itself, the bridal party is typically expected to cover the costs of travel and accommodations, which can vary significantly depending on the location of the event and length of stay (with members of the bridal party possibly needing to arrive early or stay late).

On average, wedding guests who need to travel outside of their town or city to attend a wedding spend between $840 and $1680 on travel and up to $630 on accommodations. You could end up spending significantly more if you’re covering travel costs for yourself and other family members, or if the wedding involves long-distance travel. When the wedding is local, travel costs are likely to be minimal.

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Gifts

Bridesmaids traditionally give shower and wedding gifts, which add to the cost of being in someone’s wedding. According to The Knot, the average bridesmaid bridal shower gift costs between $50 and $75, while the average bridesmaid wedding gift costs around $170. A group gift may allow you to spend less while giving something nicer than you could afford on your own.

What Does the Maid of Honor Pay For?

Being the maid of honor generally doesn’t cost more than being a bridesmaid, but it does come with additional duties and a greater commitment of time. Generally, the maid of honor is there to assist with any tasks she can take off the bride’s to-do list. They may be involved in planning prewedding events and communicating with other members of the wedding party.

In some cases, the maid of honor might plan the shower and help cover the costs. However, these days, the cost of a wedding shower is more commonly covered by family.

Recommended: How to Save for Your Dream Wedding

What Do Groomsmen Pay For?

Groomsmen typically pay for their wedding attire, the cost to attend a bachelor party (which may include sharing the cost for the groom’s attendance), the cost to attend the wedding (which might involve travel and accommodations), as well as a wedding gift. Here’s a look at what it all adds up to.

Formalwear or Tuxedo Rental

Just like bridesmaids generally pay for their dresses, groomsmen typically pay for their wedding day clothing. This might be a suit, tuxedo, shirt and slacks, or another type of attire selected by the groom or couple. Typically, the groomsmen’s attire is purchased or rented, but in some cases, a groom will let their wedding party choose from their own wardrobe, which can be a more affordable option.

If you need to rent a tux for the event, costs vary depending on what style, design, brand, and accessories you’ll need to wear. On average, you can expect to pay between $150 and $300 to rent a tux for the standard period.

Bachelor Party

Groomsmen normally take part in planning the bachelor party and may cover their own costs and the groom’s. According to a recent survey by The Knot (which included roughly 500 respondents who attended, or planned to attend, a bachelor party in 2023), the average cost of a bachelor party is $1,400 per person. The survey also found that the average bachelor celebration lasts for two days, and roughly one-fifth of attendees are flying to the party destination. Indeed, 29% of those surveyed are spending $2,000 or more to celebrate in a major metro city.

For guests who drove or were planning to drive to the event’s location, spending was less, averaging $1,000 per attendee.

Wedding Gift

Groomsmen are generally expected to give the couple a wedding gift, though they are not expected to spend more on a gift than other guests do. According to The Knot’s 2024 Real Wedding Guest Study, wedding party members spend an average of $160 on their gifts. If you want to save money, consider chipping in for a group gift with other wedding party members.

The Takeaway

It’s not unusual for a bridesmaid to spend $1,650, including the dress, bachelorette party, and gifts. Groomsmen may spend just a little bit less ($1,600) for a rental tux, bachelor party, and wedding gift. Keep in mind, however, that the cost to be in someone’s wedding can run much higher or lower, depending on the location and style of the wedding.

If you haven’t saved up enough money to be in a friend’s or family member’s wedding in advance, there are better options than throwing it all on a credit card. Personal loans are designed to help cover life’s big events. SoFi Personal Loans offer low fixed rates, no-fee options, and a quick and easy online application process. Checking your rate takes just a minute.

SoFi’s Personal Loan was named a NerdWallet 2026 winner for Best Personal Loan for Large Loan Amounts.

FAQ

What do bridesmaids and groomsmen usually pay for?

Bridesmaids and groomsmen are typically expected to pay for their wedding-day attire and accessories, travel and accommodations, and a wedding gift. They might also cover the costs of bachelorette or bachelor parties, which often make up a large portion of the expense.

How can I participate in a wedding while staying on budget?

You can keep costs down by splitting the cost of a group gift, limiting optional expenses such as professional hair and makeup, and choosing more affordable travel and accommodation options if needed. Planning ahead and discussing your expectations can help you manage your budget.

Does being the maid of honor cost more than being a bridesmaid?

Not necessarily. The maid of honor usually has more responsibilities and dedicates more time to helping with the wedding, but the role doesn’t generally cost more than being a bridesmaid, since most of the major expenses are the same and wedding shower costs are commonly covered by family.

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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Deciding whether to go to college is a major life choice with long-lasting consequences — financially, socially, and personally. For decades, a college degree has been seen as a clear pathway to better jobs and higher earnings. But rising costs, record levels of student debt, and changing workforce demands have made this choice more complex.

Below we break down the advantages and disadvantages of going to college, examine how earning potential varies by major, and explore alternative options. Understanding both sides of the equation can help you and your family make a more informed and intentional decision.

On the Fence About Going to College?

If you’re unsure whether college is worth it, you’re not alone. Surveys of college graduates show growing skepticism about the return on investment (ROI) of a four-year degree, particularly among younger workers.

In a March 2025 Harris/Indeed poll of graduates who were working or looking for work, roughly half of Gen Z respondents said they were skeptical about the value of their degree. Similarly, an August 2025 Gallup poll found that just 35% of American adults viewed college as very important, down from 70% in 2013.

Many students today weigh concerns about debt, job prospects, and the time commitment against potential long-term benefits such as higher income, career flexibility, and personal growth.

💡 Quick Tip: SoFi offers competitive fixed- or variable-interest rates. So you can get a private student loan that fits your budget.

Pros of Going to College

Going to college offers numerous benefits, from personal development to expanded career opportunities. Here’s a look at some key advantages.

Higher Earning Potential

Higher education does not guarantee wealth, but statistically, it increases access to higher-paying roles and long-term earning growth, particularly in professional and technical fields.

Data from the Bureau of Labor Statistics (BLS) show that, on average, workers with bachelor’s degrees earn 66% more per week than those with only a high school diploma. Additional education can widen this gap further: Individuals with professional degrees make, on average, 53% more than those with bachelor’s degrees.

Access to More Jobs

Many occupations list a bachelor’s degree as a minimum requirement, even when the daily tasks may not strictly require one. Holding a degree allows you to qualify for a broader range of roles and provides greater flexibility when choosing where you want to work.

According to a Georgetown University report, by 2031, 72% of all U.S. jobs are expected to require some form of postsecondary education or training. Roughly 42% of jobs will require at least a bachelor’s degree, while about 28% will be available to workers with a high school diploma or less.

Value of Learning

College provides more than job-specific training. Students develop transferable skills such as critical thinking, analytical reasoning, written and verbal communication, collaboration, and adaptability. These skills are valuable across industries and remain relevant even for those entering technical fields.

In an economy shaped by automation and rapid technological change, the ability to learn, analyze, and adapt may be just as important as specialized knowledge.

Networking

Going to college offers built-in networking environments that are difficult to replicate elsewhere. Students interact with professors, advisors, classmates, alumni, and visiting professionals. Internships, research projects, student organizations, and career fairs provide early exposure to industries and employers.

The connections you form in college can play a significant role in securing your first job after graduation and advancing throughout your career, especially in competitive fields where referrals and recommendations matter.

Lower Unemployment

BLS data consistently show that unemployment rates decline as education levels rise. For workers aged 25 and over, those with less than a high school diploma typically face the highest unemployment rates, while those with advanced degrees experience the lowest.

While no credential guarantees job security, higher education can provide insulation during economic downturns and improve reemployment prospects.

Lower Poverty

Educational attainment is strongly correlated with lower poverty levels. According to the U.S. Census, roughly 4% of Americans with a bachelor’s degree or higher were living below the poverty line in 2025, compared with approximately 23% of those without a high school diploma.

Higher earnings, steadier employment, and access to employer-provided benefits all contribute to this outcome.

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Healthier

Numerous studies show that people with higher education levels report better overall health. College graduates are more likely to have employer-sponsored health insurance, engage in preventative care, and maintain healthier lifestyles.

Education is also associated with improved mental health outcomes, partially due to increased financial stability and access to resources.

Better Educated Children

Parents with college degrees are generally more likely to emphasize academic achievement and educational attainment for their children. This can create long-term benefits across generations, including higher graduation rates and greater economic mobility.

More Likely to Save for Retirement

College graduates are more likely to work in jobs that offer retirement plans such as 401(k)s. Higher earnings also make it easier to contribute consistently to long-term savings, which can help improve financial security later in life. An April 2025 Gallup poll found that 81% of college graduates had retirement savings, compared with 39% of adults without any college education

Increased Job Stability and Benefits

Beyond wages, college degree holders are more likely to receive benefits such as paid leave, health insurance, disability coverage, and employer retirement contributions. These benefits can significantly influence quality of life and long-term financial security, even when base salaries appear similar.

Cons of Going to College

Despite its advantages, college also involves real costs and risks. Here’s a look at some of the drawbacks of going to college.

Cost of College

The rising price of higher education is one of the most substantial barriers for students today.

Cost of Tuition

According to the College Board’s 2025-26 “Trends in College Pricing” report, the average published tuition and fees for full-time students are $11,950 at public four-year in-state institutions and $45,000 at private nonprofit four-year universities. When housing, food, books, and other expenses are included, the total annual cost of attendance averages $30,990 for in-state students at public schools and $65,470 for private colleges.

Opportunity Cost of Time Spent Not Working

College requires a substantial time commitment. Full-time students typically delay full-time employment for four years or more. During that period, noncollege peers may be earning income, gaining work experience, and advancing in their careers.

For individuals confident in alternative career paths, this opportunity cost can be substantial.

High-Paying No-Degree Jobs

Not all high-paying careers require a bachelor’s degree. Skilled trades, certain technology roles, and some health care positions often rely on certifications, apprenticeships, or associate degrees instead.

Examples of relatively high-paying jobs that may not require a college degree include:

•   Wind turbine technician

•   Electrician

•   Flight attendant

•   Hearing aid specialist

•   Plumber

•   Licensed practical nurse

•   Medical records technician

•   Construction worker

These paths often involve lower training costs and faster entry into the workforce.

Underemployed College Graduates

Some graduates struggle to find work that fully utilizes their degree, leading to underemployment. Underemployment refers to recent graduates working in roles that don’t typically require a bachelor’s degree.

Research suggests that as many as 52% of college graduates are underemployed when they first enter the labor market. This can reduce the financial return on a college investment and contribute to dissatisfaction, particularly among those carrying student debt.

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Dropping Out

Not all students complete their degrees. National data shows that a substantial share of students who start college do not finish within eight years. For these individuals, the financial and time investment may not deliver the expected return, while student debt often remains.

Student Loan Debt and Long-Term Financial Impact

Student loan debt remains a major concern for many borrowers. According to the Education Data Initiative, the average student borrows more than $30,000 to earn a bachelor’s degree. Professional degrees can raise debt levels considerably: Average law school debt is around $140,000, while average medical school debt approaches $200,000.

While debt is manageable for some graduates, for others, it can become a long-term financial burden that affects major life decisions.

💡 Quick Tip: Would-be borrowers will want to understand the different types of student loans that are available: private student loans, federal Direct Subsidized and Unsubsidized loans, Direct PLUS loans, and more.

Earning Potential of Different Majors for College Graduates

The financial value of a degree is not uniform — outcomes vary widely depending on the chosen field of study.

STEM vs Humanities and Liberal Arts

An October 2025 Georgetown University report found that while a bachelor’s degree generally increases income, your major plays a critical role in determining earning potential. STEM graduates earned the highest median salaries at approximately $98,000, while graduates in arts and humanities majors earned a median salary of about $69,000.

ROI by Field of Study

Return on investment depends on both post-graduate earnings and the cost of education. A September 2024 Bankrate analysis of U.S. Census data found that degrees in engineering, nursing, and technology tend to deliver the strongest financial returns, while bachelor’s degrees in the arts and humanities often take longer to break even due to lower average pay and high tuition costs.

Understanding expected earnings by major is important when evaluating whether college makes financial sense.

Is College Right for You?

If you’re debating whether college is worth it, the following considerations can help guide your decision.

Factors to Consider Based on Career Goals and Finances

Key questions to ask include:

•   Does your intended career require a degree?

•   What is the total cost of attendance, not just tuition?

•   How much debt would you need to take on?

•   What is the expected salary in your chosen field?

Aligning your education decisions with realistic financial projections can help prevent a costly mismatch.

The Role of Passion and Personal Interests

For some students, college is closely tied to intellectual curiosity and personal fulfillment. For others, hands-on work, entrepreneurship, or technical training may be more motivating. While passion alone shouldn’t dictate the decision, it can play a key role in persistence and long-term satisfaction.

Alternatives to College

College is not the only path to success. Several alternatives can offer practical, lower-cost routes into stable careers.

Trade School

Trade schools focus on specific skills such as electrical work, welding, HVAC, and automotive repair. Programs are typically shorter and more affordable than four-year degrees and often lead directly to in-demand jobs.

Community College

Community colleges offer associate degrees and certificates at significantly lower cost than four-year institutions. Many students use them as stepping stones to bachelor’s programs or as direct pathways into technical and health care roles.

They tend to offer flexible schedules, making it easier for students to work or care for family members. About 40% of all undergraduate students in the U.S. are enrolled in community colleges, according to a December 2025 report from Columbia University’s Community College Research Center.

Industry-Specific Education Programs

Bootcamps and short-term training programs in fields like IT, cybersecurity, data analytics, and digital marketing can provide job-ready skills in three to six months rather than years.

Learning on the Job

Some careers prioritize experience over formal credentials. Entry-level roles, internships, and freelance work allow individuals to build skills while earning income, particularly in creative and technical fields. This approach can provide a debt-free alternative to college.

Apprenticeships and Certifications

Apprenticeships combine paid work with structured on-the-job training and classroom instruction. These programs often lead to industry-recognized certifications that validate specific skills and expertise.

Apprenticeships are available in a variety of fields, including manufacturing, construction, IT, health care, energy, transportation, and logistics.

The Takeaway

Going to college can be a powerful investment — but only when it aligns with clear goals, realistic finances, and thoughtful planning. For many careers, higher education opens doors to stability, higher earnings, and long-term benefits. For others, alternative paths may offer faster and more affordable routes to success.

Ultimately, the most important question is not whether college is worth it in general, but whether it’s worth it for you.

When it comes to paying for college, students may rely on a combination of cash savings, scholarships, grants, and federal and private student loans.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

What are the biggest reasons for not going to college?

The biggest reasons for not going to college often center on the high cost, which can lead to significant student loan debt and long-term financial burden. Other factors include the opportunity cost of time spent not working, the risk of dropping out without a degree, and the possibility of underemployment (working in a job that doesn’t require a degree). Some individuals find that career-focused alternatives, like trade schools or apprenticeships, offer a faster, more affordable path to a stable, well-paying job.

What are the most important reasons to attend college?

The most important reasons to go to college include:

•   Higher earning potential: College graduates statistically earn significantly more than those with only a high school diploma.

•   Access to more jobs: A degree is often a minimum requirement for professional and technical occupations, offering greater career flexibility.

•   Skill development: College helps develop valuable transferable skills like critical thinking, communication, and adaptability.

•   Lower unemployment: Degree holders consistently have lower rates of unemployment and poverty.

•   Networking: College provides connections with alumni, professors, and professionals that can be important for career advancement.

How does college compare to trade school as far as cost and benefit go?

College typically involves significantly higher costs and takes longer (four years or more), often leading to more student debt. However, a bachelor’s degree statistically offers the highest lifetime earning potential and the greatest flexibility in career path.

Trade schools are generally less expensive, require less time (often six months to two years), and provide faster entry into high-demand, skilled trades. While trade school pay may be lower than a top college degree, the lower cost and time commitment may result in a faster return on investment.

Can you succeed financially without going to college?

Yes, absolutely. Financial success does not strictly require a four-year college degree. Many paths lead to high earnings and stability without traditional college, including trade schools, apprenticeships, industry-specific certifications (like those in IT or tech), and entrepreneurial ventures. These alternatives often involve lower debt and faster entry into the workforce.

What are good alternatives to a traditional four-year degree?

Top alternatives to a traditional four-year degree include:

•   Trade school: Focuses on specific skills and offers faster, more affordable training for in-demand jobs like plumbing, electrical work, and automotive technology.

•   Community college: Provides lower-cost associate degrees and certificates, often serving as a stepping stone to a bachelor’s or a direct path to technical roles.

•   Apprenticeships/certifications: Combines paid work with structured training, leading to industry-recognized credentials in fields like IT, health care, and construction.

•   Industry-specific education programs: Short-term bootcamps in tech fields (such as coding or data analytics) for rapid skill acquisition.

•   Learning on the job: Building experience and skills through entry-level roles or internships.

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SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Maxing out your 401(k) involves contributing the maximum allowable amount to your workplace retirement account to increase the benefit of compounding and appreciating assets over time.

All retirement plans come with contribution caps, and when you hit that limit it means you’ve maxed out that particular account.

There are a lot of things to consider when figuring out how to max out your 401(k) account, including whether maxing out your account is a good idea in the first place. Read on to learn about the pros and cons of maxing out your 401(k).

What Exactly Does It Mean to ‘Max Out Your 401(k)?’

Maxing out your 401(k) means that you contribute the maximum amount allowed in a given year, as specified by the established 401(k) contribution limits. But it can also mean that you’re maxing out your contributions up to an employer’s percentage match.

If you want to max out your 401(k) in 2025, you’ll need to contribute $23,500. If you’re 50 or older, you can contribute an additional $7,500, for an annual total of $31,000. In addition, in 2025, those aged 60 to 63 may contribute up to an additional $11,250 instead of $7,500, thanks to SECURE 2.0, for an annual total of $34,750.

To max out your 401(k) in 2026, you would need to contribute $24,500. If you’re 50 or older, you can contribute an additional catch-up contribution of $8,000, for a total for the year of $32,500. Also in 2026, those aged 60 to 63 may contribute up to an additional $11,250 SECURE 2.0 catch-up instead of $8,000, for an annual total of $35,750.

Should You Max Out Your 401(k)?

Generally speaking, yes, it’s a good thing to max out your 401(k) so long as you’re not sacrificing your overall financial stability to do it. Saving for retirement is important, which is why many financial experts would likely suggest maxing out any employer match contributions first.

But while you may want to take full advantage of any tax and employer benefits that come with your 401(k), you also want to consider any other financial goals and obligations you have before maxing out your 401(k).

That doesn’t mean you should put other goals first, and not contribute to your retirement plan at all. That’s not wise. Maintaining a baseline contribution rate for your future is crucial, even as you continue to save for shorter-term aims or put money toward debt repayment.

Other goals might include:

•   Is all high-interest debt paid off? High-interest debt like credit card debt should be paid off first, so it doesn’t accrue additional interest and fees.

•   Do you have an emergency fund? Life can throw curveballs — it’s smart to be prepared for job loss or other emergency expenses.

•   Is there enough money in your budget for other expenses? You should have plenty of funds to ensure you can pay for additional bills, like student loans, health insurance, and rent.

•   Are there other big-ticket expenses to save for? If you’re saving for a large purchase, such as a home or going back to school, you may want to put extra money toward this saving goal rather than completely maxing out your 401(k), at least for the time being.

Once you can comfortably say that you’re meeting your spending and savings goals, it might be time to explore maxing out your 401(k). There are many reasons to do so — it’s a way to take advantage of tax-deferred savings, employer matching (often referred to as “free money”), and it’s a relatively easy and automatic way to invest and save, since the money gets deducted from your paycheck once you’ve set up your contribution amount.

How to Max Out Your 401(k)

Only a relatively small percentage of people max out their 401(k)s, but that doesn’t mean you can’t be one of them. Here are some strategies for how to max out your 401(k).

1. Max Out 401(k) Employer Contributions

Your employer may offer matching contributions, and if so, there are typically rules you will need to follow to take advantage of their match.

An employer may require a minimum contribution from you before they’ll match it, or they might match only up to a certain amount. They might even stipulate a combination of those two requirements. Each company will have its own rules for matching contributions, so review your company’s policy for specifics.

For example, suppose your employer will match your contribution up to 3%. So, if you contribute 3% to your 401(k), your employer will contribute 3% as well. Therefore, instead of only saving 3% of your salary, you’re now saving 6%. With the employer match, your contribution just doubled. Note that employer contributions can range from nothing at all up to a certain limit. It depends on the employer and the plan.

Since saving for retirement is one of the best investments you can make, it’s wise to take advantage of your employer’s match. Every penny helps when saving for retirement, and you don’t want to miss out on this “free money” from your employer.

If you’re not already maxing out the matching contribution and wish to, you can speak with your employer (or HR department, or plan administrator) to increase your contribution amount, you may be able to do it yourself online.

2. Max Out Salary-Deferred Contributions

While it’s smart to make sure you’re not leaving free money on the table, maxing out your employer match on a 401(k) is only part of the equation.

In order to make sure you’re setting aside an adequate amount for retirement, consider contributing as much as your budget will allow. As noted earlier, individuals younger than age 50 can contribute up to $23,500 in 2025, and up to $24,500 in 2026.

Those contributions aren’t just an investment in your future lifestyle in retirement. Because they are made with pre-tax dollars, they lower your taxable income for the year in which you contribute. For some, the immediate tax benefit is as appealing as the future savings benefit.

3. Take Advantage of Catch-Up Contributions

As mentioned, 401(k) catch-up contributions allow investors aged 50 and over to increase their retirement savings — which is especially helpful if they’re behind in reaching their retirement goals.

Individuals 50 and over can contribute an additional $7,500 for a total of $31,000 in 2025. And in 2026, those 50 and older can contribute an extra $8,000 for a total of $32,500. And in both 2025 and 2026, those aged 60 to 63 can contribute up to an additional $11,250, instead of $7,500 in 2025 and $8,000 in 2026, for a total of $34,750 and $35,750 respectively. Putting all of that money toward retirement savings can help you truly max out your 401(k).

As you draw closer to retirement, catch-up contributions can make a difference, especially as you start to calculate when you can retire. Whether you have been saving your entire career or just started, this benefit is available to everyone who qualifies.

And of course, in many cases, this extra contribution will lower taxable income even more than regular contributions. Although using catch-up contributions may not push everyone to a lower tax bracket, it will certainly minimize the tax burden during the next filing season for many filers — with an important exception.

Under a new law regarding catch-up contributions that went into effect on January 1, 2026 (as part of SECURE 2.0), individuals aged 50 and older whose FICA wages exceeded $150,000 in 2025 are required to put their 401(k) catch-up contributions into a Roth 401(k) account. Because of the way Roth accounts work, these individuals will pay taxes on their catch-up contributions upfront, and make eligible withdrawals tax-free in retirement. This means their taxable income will not be lowered; they could even potentially move into higher tax bracket. Those impacted by the new law should check with their employer or plan administrator to find out how to proceed.

4. Reset Your Automatic 401(k) Contributions

When was the last time you reviewed your 401(k)? It may be time to check in and make sure your retirement savings goals are still on track. Is the amount you originally set to contribute each paycheck still the correct amount to help you reach those goals?

With the increase in contribution limits most years, it may be worth reviewing your budget to see if you can up your contribution amount to max out your 401(k). If you don’t have automatic payroll contributions set up, you could set them up.

It’s generally easier to save money when it’s automatically deducted; a person is less likely to spend the cash (or miss it) when it never hits their checking account in the first place.

If you’re able to max out the full 401(k) limit, but fear the sting of a large decrease in take-home pay, consider a gradual, annual increase such as 1% — how often you increase it will depend on your plan rules as well as your budget.

5. Put Bonus Money Toward Retirement

Unless your employer allows you to make a change, your 401(k) contribution may be deducted from any bonus you might receive at work. Some employers allow you to determine a certain percentage of your bonus to contribute to your 401(k).

Consider possibly redirecting a large portion of a bonus to 401k contributions, or into another retirement account, such as an individual retirement account (IRA). Because this money might not have been expected, you won’t miss it if you contribute most of it toward your retirement.

You could also do the same thing with a raise. If your employer gives you a raise, consider putting it directly toward your 401(k). Putting this money directly toward your retirement can help you inch closer to maxing out your 401(k) contributions.

6. Maximize Your 401(k) Returns and Fees

Many people may not know what they’re paying in investment fees or management fees for their 401(k) plans. By some estimates, the average fees for 401(k) plans are between 0.5% and 2%, but some plans may have higher fees.

Fees add up — even if your employer is paying the fees now, you’ll have to pay them if you leave the job and keep the 401(k).

Essentially, if an investor has $100,000 in a 401(k) and pays $1,000 or 1% (or more) in fees per year, the fees could add up to thousands of dollars over time. Any fees you have to pay can chip away at your retirement savings and reduce your returns.

It’s important to ensure you’re getting the most for your money in order to maximize your retirement savings. If you are currently working for the company, you could discuss high fees with your HR team.

One way to potentially lower your costs is to find more affordable investment options. Generally speaking, index funds often charge lower fees than other investments. If an employer’s plan offers an assortment of low-cost index funds, may consider investing in these funds to save some money and help build a diversified portfolio.

What Happens If You Contribute Too Much to Your 401(k)?

After an individual maxes out their 401(k) for the year — meaning they’ve hit the contribution limit corresponding to their age range — if they don’t stop making contributions they will risk paying additional taxes on their overcontributions.

In the event that an individual makes an overcontribution, they might let their plan manager or administrator know, and withdraw the excess amount. If they leave the excess in the account, it’ll be taxed twice — once when it was contributed initially, and again when they take it out.

What to Do After Maxing Out a 401(k)?

If you max out your 401(k) this year, pat yourself on the back. Maxing out your 401(k) is a financial accomplishment. But now you might be wondering, what’s next? Here are some additional retirement savings options to consider if you have already maxed out your 401(k).

Open an IRA

An individual retirement account (IRA) can be an option to complement an employer’s retirement plans. With a traditional IRA, you can contribute pre-tax dollars up to the annual limit, which is $7,000 in 2025. If you’re 50 or older, you can contribute an extra $1,000, for an annual total of $8,000 in 2025. In 2026, you can contribute up to $7,500, while those 50 and older can contribute an additional $1,100, for a total of $8,600 for 2026.

You may also choose to consider a Roth IRA. As with a traditional IRA, the annual contribution limit for a Roth IRA in 2025 is $7,000, and $8,000 for those 50 or older. And in 2026, the annual Roth IRA contribution limit is $7,500, and $8,600 for those age 50 and up.

Roth IRA accounts have income limits, but if you’re eligible, you can contribute with after-tax dollars, which means you won’t have to pay taxes on earnings withdrawals in retirement as you do with traditional IRAs.

It’s possible to open an IRA at a brokerage, mutual fund company, or other financial institution. If you ever leave your job, you can typically roll your employer’s 401(k) into your IRA without facing tax consequences as long as both accounts are similarly taxed, such as rolling funds from a traditional 401(k) to a traditional IRA, and funds are transferred directly from one plan to the other. Doing a 401(k) to IRA rollover may allow you to invest in a broader range of investments with lower fees.

Boost an Emergency Fund

Experts often advise establishing an emergency fund with at least three to six months of living expenses before contributing to a retirement savings plan. Perhaps you’ve already done that — but haven’t updated that account in a while. As your living expenses increase, it’s a good idea to make sure your emergency fund grows, too. This will cover you financially in case of life’s little curveballs: new brake pads, a new roof, or unforeseen medical expenses.

Save for Health Care Costs

Contributing to a health savings account (HSA) can reduce out-of-pocket costs for expected and unexpected health care expenses, though you can only open and contribute to an HSA if you are enrolled in a high-deductible health plan (HDHP).

For tax year 2025, those eligible can contribute up to $4,300 pre-tax dollars for an individual plan or up to $8,550 for a family plan. Those 55 or older who are not enrolled in Medicare can make an additional catch-up contribution of $1,000 per year.

For tax year 2026, those who are eligible can contribute up to $4,400 for an individual plan or up to $8,750 for a family plan. Those 55 or older who are not enrolled in Medicare can again make an additional catch-up of $1,000.

The money in this account can be used for qualified out-of-pocket medical expenses such as copays for doctor visits and prescriptions. Another option is to leave the money in the account and let it grow for retirement. Once you reach age 65, you can take out money from your HSA without a penalty for any purpose. However, to be exempt from taxes, the money must be used for a qualified medical expense. Any other reasons for withdrawing the funds will be subject to regular income taxes.

Increase College Savings

If you’re feeling good about maxing out your 401(k), consider increasing contributions to your child’s 529 college savings plan (a tax-advantaged account meant specifically for education costs, sponsored by states and educational institutions).

College costs continue to creep up every year. Helping your children pay for college helps minimize the burden of college expenses, so they hopefully don’t have to take on many student loans.

Open a Brokerage Account

After maxing out a 401(k), individuals might also consider opening a brokerage account. Brokerage firms offer various types of investment accounts, each with different services and fees. A full-service brokerage firm may provide different financial services, which include allowing investors to trade securities.

Many brokerage firms require individuals to have a certain amount of cash to open accounts and have enough funds for trading fees and commissions. While there are no limits on how much can be contributed to the account, earned dividends are taxable in the year they are received. Therefore, if you earn a profit or sell an asset, you must pay a capital gains tax. On the other hand, if you sell a stock at a loss, that becomes a capital loss. This means that the transaction may yield a tax break by lowering your taxable income.

Pros and Cons of Maxing Out Your 401(k)

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The Takeaway

Maxing out your 401(k) involves matching your employer’s maximum contribution match, and also, contributing as much as legally allowed to your retirement plan in a given year. If you have the flexibility in your budget to do so, maxing out a 401(k) can be an effective way to build retirement savings.

And once a 401(k) is maxed out? There are other ways an individual might direct their money, including opening an IRA, or contributing more to an HSA or to a child’s 529 plan.

Prepare for your retirement with an individual retirement account (IRA). It’s easy to get started when you open a traditional or Roth IRA with SoFi. Whether you prefer a hands-on self-directed IRA through SoFi Securities or an automated robo IRA with SoFi Wealth, you can build a portfolio to help support your long-term goals while gaining access to tax-advantaged savings strategies.

Help build your nest egg with a SoFi IRA.

FAQ

What happens if I max out my 401(k) every year?

Assuming you don’t overcontribute, you may see your retirement savings increase if you max out your 401(k) every year, and hopefully, be able to reach your retirement and savings goals sooner.

Will you have enough to retire after maxing out a 401(k)?

There are many factors that need to be considered to determine if you’ll have enough money to retire if you max out your 401(k). Start by getting a sense of how much you’ll need to retire by using a retirement expense calculator. Then you can decide whether maxing out your 401(k) for many years will be enough to get you there, assuming an average stock market return and compounding built in.

First and foremost, you’ll need to consider your lifestyle and where you plan on living after retirement. If you want to spend a lot in your later years, you’ll need more money. As such, a 401(k) may not be enough to get you through retirement all on its own, and you may need additional savings and investments to make sure you’ll have enough.

What is the best way to max out a 401(k)?

Some effective ways to max out a 401(k) include contributing up to the allowable amount for the year (for 2025, that’s $23,500 for those under age 50, and for 2026, it’s $24,500); using catch-up contributions if you’re aged 50 or older ($7,500 in 2025, and $8,000 in 2026, or $11,250 if you’re ages 60 to 63 in 2025 and 2026); contributing enough to get your employer’s matching contributions if offered; automating your contributions and increasing them yearly, if possible; and directing a percentage of any bonus you receive into your 401(k).

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