I’m 55 years old and just started 401(k) matching, but can only afford to set aside 3% of my paycheck. Is it even worth contributing and will it be enough for a secure retirement?

Will 3% make a dent?

Consider this scenario: You're a middle-aged professional who's spent years in the workforce but only recently started contributing to a 401(k). Your employer provides a common matching benefit: 50% match on contributions up to 6% of your salary.

You're motivated to save enough to make a meaningful difference, but you're also hesitant about contributing heavily, questioning whether you can afford it now and whether it will matter much, given your late start.

Should you contribute the 3% you can afford even if you won’t get your employer’s full match?

Absolutely, yes. By not contributing anything, you're essentially turning down free money — money that could significantly boost your retirement savings.

With a 50% match up to 6% of your income, you’d have to contribute 6% on your end to get the full benefit. Contributing 3% leaves some money on the table, but it’s better than nothing.

Even if you’re in your 50s, contributing this modest amount can yield significant benefits. Thanks to compound growth, even 10 to 20 years of investing at a modest rate can dramatically boost your retirement nest egg. And if you're over 50, you're eligible to make additional catch-up contributions, further padding your retirement funds.

Let’s say you’re 55 and make $80,000 a year. If you contribute 3% or $200 of your pay each month, your employer will match 50% of that with $100, making your total monthly contribution $300.

If you were to contribute the full 6% each month, you’d set aside $400, while your employer would contribute $200, increasing your monthly 401(k) contribution to $600.

In short, you’re only getting half of what you could.

But there are valid factors to be considered. Middle-aged professionals often face financial pressures such as mortgages, medical bills and supporting college-bound children. These responsibilities might make investing in your retirement more difficult, especially given your delayed start.

A 3% contribution alone might not be sufficient for a fully comfortable retirement, especially if you anticipate a lengthy retirement period.

Your 401(k) typically invests in a mix of stocks and bonds, and with only a decade or two before retirement, you have less time to recover from potential market downturns.

Additionally, your employer’s plan might have a default target-date fund, which shifts investments to a more conservative strategy as you near retirement, limiting growth potential compared to starting younger.

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Is a 401(k) enough for retirement?

Many Americans share concerns about whether their 401(k) will sufficiently cover retirement expenses — and you’re certainly not alone if you're worried.

To assess whether your 401(k) is adequate, you can begin by estimating your annual retirement expenses. Include housing, utilities, groceries, travel and, importantly, health care costs, factoring in a conservative inflation rate of 2% to 3% annually.

Then, evaluate your other retirement income sources. Consider your expected Social Security benefits based on your desired retirement age, potential income from businesses or properties and any pensions.

Increasing life expectancy means you'll likely need your savings to stretch further. A study by HealthView Services recommends taking an individualized approach to your retirement plan that considers all of your health conditions. That way you’ll have a better idea of how long you should expect to save for.

If you're contributing a small percentage late in your career, supplementing your 401(k) with additional investment avenues might be wise. Opening a Roth IRA alongside your 401(k) is an excellent strategy to boost your savings. With tax-free growth, even contributions made aggressively over the next 10 to 20 years can significantly increase your retirement security.

Remember, it's never too late to bolster your retirement savings — but the sooner you act, the more comfortably you'll retire.