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Maxing out your retirement accounts is a common piece of advice from financial experts. It sounds like a smart, ambitious goal, and for some people, it is. Personal finance expert Dave Ramsey\u2018s company Ramsey Solutions calls<\/a> it a \u201cShaquille O\u2019Neal-level slam dunk\u201d for building wealth over time<\/a>. But just because it\u2019s ideal on paper doesn\u2019t mean it\u2019s doable for everyone.<\/p>\n<\/p>\n For this year, the maximum 401(k) contribution is $23,500<\/a>. Those over 50 can add another $7,500, and some aged 60 to 63 can go even higher. Add a Roth IRA on top, with its own annual limit, and the total climbs quickly. According<\/a> to Vanguard last year, only 14% of workers max out their 401(k) each year.<\/p>\n Don’t Miss:<\/p>\n In a recent Reddit thread on r\/MiddleClassFinance<\/a>, titled, \u201cHow many of you can afford to max your 401k and Roth IRA every year?\u201d one commenter joked, \u201cIf you read Reddit, it\u2019s closer to 120% of workers maxing out.\u201d<\/p>\n The Reddit thread turned into an unrestrained discussion about who can realistically afford to hit those limits. While some users in high-earning households said they consistently max out both their 401(k) and Roth IRA, others described how tight their budgets would become if they tried.<\/p>\n \u201cI make about $90K a year. I would have to contribute 26% of my check to max it out,\u201d one person wrote. \u201cIt\u2019s just not doable, especially with other savings goals. I feel OK with 15%.\u201d Another added, \u201cI could technically afford to do it, but then I\u2019d have no life. Like 0 vacations & 0 fun. So I\u2019m taking a more balanced approach.\u201d<\/p>\n Trending: Record Options Trading Activity Has a New Winner \u2014 Retail Traders Using This AI Automation Platform<\/a><\/p>\n On the other side, a single mom said, \u201cI\u2019m in no position to do this whatsoever. I contribute $300 a month. I’m fighting for full custody of my children.\u201d<\/p>\n One person who says they\u2019re middle class said, \u201cThere is no way with all our other bills we could max anything out. We have student loans and a mortgage and had daycare bills, medical payments, etc. We are lucky we can put anything in retirement.\u201d<\/p>\n Ramsey Solutions advises waiting until you\u2019re completely debt-free<\/a>\u2014including your mortgage\u2014before trying to max out retirement accounts. According to the company, there are three situations where it makes sense to go all-in: you\u2019re debt-free, a high-income earner, or trying to catch up on retirement savings.<\/p>\n \u201cIf you’re 100% debt-free and have an annual salary of around $156,600 or more, you could max out your 401(k) simply by investing your entire 15% through your workplace retirement plan,\u201d Ramsey Solutions says.<\/p>\n For those who aren\u2019t there yet, they suggest a step-by-step approach: contribute enough to get the employer match, then fund a Roth IRA<\/a>, and finally return to the 401(k) to reach 15% of gross income.<\/p>\n See Also: Backed by $300M+ in Assets and Microsoft’s Climate Fund, Farmland LP Opens Vital Farmland III to Accredited Investors<\/a><\/p>\n In the same Reddit thread, people shared a wide range of savings strategies shaped by life stage, income level and financial obligations. Some pointed out that employer matches and other benefits mean they don\u2019t need to hit the maximum to stay on track. Another user said they maxed out both accounts for years but backed off after a divorce: \u201cFeels like I got set back 10 years.\u201d<\/p>\n Others stressed that liquidity matters too. \u201cThere is such a thing as being retirement poor, where all your wealth is tied up in retirement accounts with no access,\u201d one person wrote.<\/p>\n Maxing out your 401(k) and Roth IRA can offer big long-term rewards, but most middle-class earners balance that goal against housing costs, childcare, debt and day-to-day living.<\/p>\n Financial experts like Ramsey offer a precise roadmap, but even they acknowledge that it\u2019s not one-size-fits-all. Build toward those targets when you can, but don\u2019t wreck your budget trying to force it.<\/p>\n Read Next: Have $100k+ to invest? Charlie Munger says that’s the toughest milestone \u2014 don’t stall now. Get matched with a fiduciary advisor and keep building<\/a><\/p>\n Image: Shutterstock<\/p>\n This article Financial Experts Say To Max Out Your 401(k) And Roth IRA Annually, But How Many People Can Actually Afford To Do It?<\/a> originally appeared on Benzinga.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. 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