Are You Saving as Much in Your Cardinal 401k as Your Peers?
For many Cardinal employees, the 401(k) serves as the foundation of retirement planning. Yet one question consistently arises: Am I saving enough—and how do I compare to others in similar roles?
A recent Wall Street Journal article reports that the average 401(k) participant is saving 14.3% of their income—combining both employee and employer contributions. While individual circumstances vary, this benchmark offers a helpful lens: Are you ahead of the curve, falling behind, or right on pace with your peers?
Across our Cardinal employee client base, contribution rates vary based on individual circumstances. That said, most are saving at least 10% of their own pay, with many closer to 15% or more—plus the Cardinal match. This higher savings rate often positions our clients for retirement, or a career downshift, in their mid to late 50s—and in some cases, even earlier.
If you're not at that level yet, don't worry—you're not alone. It took me time to get there after starting at Cardinal, and many of our clients began with much lower initial savings rates as well.
One of the simplest ways to boost your contribution rate over time is to increase it gradually—especially during the merit cycle. Before adjusting your lifestyle to a new income level, consider committing half of your merit increase to your 401(k). For example: if you receive a 2% raise, increase your 401(k) contribution by 1%. A 4% raise? Bump your savings by 2%.
This approach allows your take-home pay to rise modestly after a merit increase, while steadily boosting your savings rate. Over the years, countless clients have followed this strategy, and the consensus is clear: “I never missed it.” Yet the long-term impact is huge. In fact, over time, several clients have moved their target retirement date up—from the mid-60s to the mid or late 50s—primarily because of this one change.
The average American expects to need nearly $1.3 million for retirement. For many Cardinal clients in leadership roles, their target portfolio is often two to three times that amount. Yet many people will fall short—not due to lack of income, but because they fail to consistently increase contributions over time.
This time of year, many of you receive bonuses, RSUs, and other forms of stock compensation. When used strategically, these can be powerful tools for accelerating retirement savings. If you're still under the 401(k) contribution limits, consider directing a portion of your bonus into your plan. For 2025, the standard contribution limit is $23,500, with an additional $7,500 catch-up for those age 50 and older—and a further $3,750 catch-up for those between ages 60 and 64. If you've already maxed out your 401(k), stock proceeds can be a great way to fund a Roth IRA or build out a taxable investment account.
Whether you're in operations, IT, HR, finance, or sales, it's worth asking: Is my current savings rate positioning me for long-term flexibility and peace of mind? If not, merit and bonus season is the perfect time to make meaningful progress toward your savings goals.
Take care and, as always, stay the course!
Colburn Wealth Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.