5 401(k) Rules That Worked for Decades (and Why They’re Breaking Down Now)
Some rules seem to be good for a lifetime. For example, most finance pros would probably tell you that having a rainy day fund is a good idea for your money.
On the other hand, some finance rules seem to make less sense over time. This is especially true when people are generally living longer and spending more time in retirement.
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We spoke to some finance experts to get a quick list of 401(k) rules that have worked for decades but may not be the best ones to follow in 2026 and beyond.
1. A 401(k) Is Enough
You probably won’t hear this from a financial advisor, but some consumers still may believe the old rule that having a 401(k) is enough to feel secure for the future.
“For a lot of households, contribution limits haven't kept pace with what retirement actually costs, and people are finding out later than they'd like that they probably needed other vehicles running alongside it,” said Taylor Kovar, certified financial planner (CFP) and cofounder of UseKlear. “Rules like this weren’t wrong when they started, but the world looks pretty different now.”
2. Save 10%
You’ve likely heard the advice about saving 10% of pretax income for retirement. As with many other hardline rules surrounding specific figures, this one may not be flexible enough in current times.
“This is probably the one I hear most, and it made sense when it was created,” Kovar said. “But with inflation, longer lifespans and rising costs across the board, that number often just doesn't get people where they need to go anymore.”
3. Age-Based Allocation
If you’re not familiar with this rule, the basic idea is that you subtract your age from 100 to figure out your stock exposure. In other words, the number you come up with would be the percentage for equities, and the rest would be used for more conservative options such as bonds.
“Someone retiring at 65 today could have 25 or 30 years ahead of them, so being too conservative too early could create real problems down the road,” Kovar said.
4. Maximize Pretax Contributions to Your Retirement
“Just as investment diversification is important, so is tax diversification,” said Marguerita Cheng, CFP and CEO of Blue Ocean Global Wealth. “It’s important to have taxable, tax-free and tax-deferred savings and investments. High-income earners now need to redirect catch-up contributions to the Roth 401(k) option in their employer-sponsored plans.”
5. Don’t Withdraw Money From Your 401(k) Until You Reach RMD
As you may know, the SECURE Act and SECURE 2.0 legislation have had impacts in recent years on the required minimum distribution (RMD). As noted by the Internal Revenue Service, RMDs are the minimum amounts you need to withdraw each year from some retirement accounts.
“It may make sense to access IRAs and your 401(k) prudently and sustainably before RMD age because of IRMAA, the income-related monthly adjustment amount, which is an additional surcharge applied to Medicare Part B and Part D premiums for beneficiaries with higher incomes,” Cheng said.
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This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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