401(k) Complete Guide for Beginners 2026

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401(k) Complete Guide for Beginners 2026

By WealthChecker Team  |  Retirement  |  7 min read

If your employer offers a 401(k) match and you're not contributing enough to get all of it, you're leaving free money on the table. Don't!

2025 401(k) Limits: Under 50: $23,500/year. Age 50+: $31,000/year (includes $7,500 catch-up contribution).

Traditional vs Roth 401(k)

FeatureTraditionalRoth
ContributionsPre-tax (saves taxes now)After-tax (no deduction)
WithdrawalsTaxed as income100% tax-free!
Best if...High tax bracket nowHigher taxes in retirement

What to Invest In

Target Date Fund: Easiest option. Pick fund closest to your retirement year. Auto-rebalances as you age!

Avoid: Company stock (too concentrated), funds with expense ratios above 0.5%.

Priority Order

1. 401(k) up to full employer match (free money!) → 2. Max Roth IRA ($7,000) → 3. Max 401(k) ($23,500) → 4. Taxable brokerage

Don't Cash Out Early: Early withdrawal triggers 10% penalty + income taxes. A $30,000 withdrawal can cost $12,000+. Leave it alone!

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