I work for a company that offers 401k plan with a solid match. 6% but it vests over 3 years.

Anyway, people always tell me to contribute and they discuss amongst each other how much they contribute. Usually they say they contribute maybe 2-5-10% to their 401ks. I'm very quiet when people start discussing 401ks because I don't want to sound arrogant or like I'm bragging. They always tell me, "You should increase your 401k contribution by 1% every year."

Sounds good, but I can't do that, per IRS limits. I'm maxing mine out with to the IRS limit of $19,000 for 2019. I have been maxing out since I was 23 at previous employers too. My previous jobs offered the after-tax option too, this one does not, but I maxed that out as much as I could too. So pretty much I have it maxed out pretty well.

I want people to talk about it so maybe people who are uncomfortable with investing could normalize it and see it as something they should do.

On the other hand, I don't want to discuss the details of how much I contribute because it usually results in people think I am making a lot of money even though they can infer that I'm not (these are people with very similar roles to me and the band is not more than $10-15%).

So how do I handle conversations about the 401k?

  • Can you talk in a more general sense about maxing out 401ks as an option, like when those colleagues bring up that you should "increase your contribution by 1% each year" or whatever - agree with them and that you've read that on [some financial advice websites that you could name] and say e.g.: "actually, those websites recommend maxing out the contributions each year for those who can afford to!" But you want to avoid giving 'investment advice' in the workplace if possible as I have seen that go horribly wrong! Oct 17, 2019 at 18:17

4 Answers 4


Only you can judge whether your coworkers would hold maxing out your 401K against you. I've never worked with such people, nor have friends. I believe there are plenty of advisers who recommend maxing out if you can afford it. Perhaps bringing up these advisers would at least give you a starting point on discussing it. Or simply don't discuss actual amounts and merely agree that trying to put as much as you can into pretax retirement plans is good. Only HR knows how much you're contributing.

Note, if you are perceived as extremely frugal, then you may get unwanted advice along the lines of "you should live a little" and such instead.


So how do I handle conversations about the 401k?

You talk to them about their 401K, in percentages, and never about your own.


You should increase your 401k contribution by 1% every year.

That is really great advice that I try and follow, and it might hurt a bit but it is a great strategy. Are you doing that?

What do you think about the ROTH option?

Its tough, because you not only lose the contribution but also have to pay taxes on it. It is far easier to do the non ROTH option. But I try and put at least some of my savings in ROTH as it is a great long term strategy. What are you doing?

What percentage do you contribute?

Most people won't ask this. However: I always try to do at least the match. 15% of your income is better, but really hard. What do you contribute?

In no case did you lie or dismiss the conversation. Also you validated the other person, and made them feel like they have given you sage advice. Being that most people like to talk about themselves, they will have a very positive feeling about the conversation and most won't notice that you gave almost no information.

Some more thoughts:

What do you invest in?

Here I would talk in general terms about age based asset allocation and the risks associated with being too conservative. You might give some numbers like "age in bonds" type thing. (At 30 years old you should have 30% in bonds, or whatever number you like.)

How do I increase my contributions?

Talk about budgeting and talk about some good budgeting tools/financial gurus. Pointing them to Dave Ramsey is fantastic for the uninitiated. You can always say you do a version of D.R. (dump a bunch of money in your 401K).

Good work!


You handle conversations about your 401k in a similar way you would handle any other personal finances chat. You disclose as much information as you want to disclose, not more, not less.

You don't want to give too much detail so your colleagues don't think you're bragging or that you are minted (it doesn't really matter whether you are or not, it's about perception in this case), and that's perfectly fine. I'm like that too, in the sense that my personal finances are personal, no matter if they are good or bad.

You said:

I want people to talk about it so maybe people who are uncomfortable with investing could normalize it and see it as something they should do.

What you can do is give advice or your opinion without going into details of your personal finances. For example, you could say:

"Yes, I agree, increasing your 401k contributions by 1% every year is the right thing to do, because of X, Y and Z."

You are not disclosing any personal information, while still participating in the conversation, hopefully encouraging those who are uncomfortable to feel safer to discuss these topics.


By maxing out your 401(k) contribution, you're doing a smart thing. Specifically, you're starting early in life to save for later in your life.

Why is it smart? (You know this answer). It's the power of compound interest. What you save in your 20s and 30s will grow. If your plan invests your money wisely the growth over decades will astonish you. I'm just retiring, and wow, a few mill! Much more than my kids will need to buy a box and rent a backhoe.

People who don't use the 401(k) system are, bluntly, making a big mistake.

Two things about talking about this in public.

  1. Some people need most of their pay to handle current expenses. Those folks can't max out.
  2. People who say, "increase your contribution by 1% a year" offer really good advice to the folks who can't max out. They're saying "gradually arrange your household budget to allow you to save more money, and use the 401(k) system to save it."

I don't think you need to be embarrassed by your choice. Pitch it proudly. Just be sensitive to people who can't max out. They are likely to be embarrassed by their situation, and "add 1% per year" is useful advice for them. It offers a path for them to get the retirement savings they need.

  • I totally agree with you. There is one guy who mentioned maxing his out, but if I remember, he also mentioned his wife is a doctor lol. It's tough to save that much especially if you have kids or other relatives you financially support such as elderly parents etc.
    – Max A.
    Oct 17, 2019 at 12:19

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