Can I Add More Money to My 401k Account Whenever I Want?

Find out how and when to make a 401k contribution.

When you find yourself between jobs or if your employer doesn’t offer a 401k retirement account, you might wonder, “Can I add money to my 401k?” Unfortunately, employers don’t allow you to contribute to your 401k outside of payroll, which means you can’t add extra cash to your account unless it’s funneled from your paycheck via automatic deposit. Here’s what you can do to prepare for retirement by maximizing your 401k contributions.

401k Retirement Plan Contributions Explained

Although 401ks are not the only means of saving for retirement, they offer many perks that make them appealing. In addition to your contributions, your employer can contribute to your plan on your behalf as well. Employers can match your contributions dollar for dollar, a percentage of your contributions, or a combination of the two, and might also put a dollar limit on the total match. For example, your company might match the first 3 percent of your salary of your salary dollar for dollar, and the next 3 percent at 50 cents per dollar, up to a maximum of $10,000.

The 401k cap for contributions is substantially higher than the limits for an IRA. For 2018, you’re allowed to contribute up to $18,500 of your salary to your 401k. Plus, people age 50 or older can make an additional catch-up contribution of as much as $6,000, for a total of up to $24,000. Note that 401k limits can change from year to year with inflation.

Although you can’t write a check or deposit cash straight into your 401k account, there might be options for you to increase your contributions before the end of the year. Check with your 401k plan administrator to learn how often you can make a free change to your contribution limits.

Related: 13 Ways to Increase Your 401k

401k Alternatives

Just because contributing to a 401k plan isn’t an option doesn’t mean you have to stop saving money for retirement altogether. Instead, here are a few retirement account alternatives:

  • Traditional IRAs: Anyone who has an earned income can contribute to a traditional IRA. Contribution limits are $5,500 — or $6,500 if you’re 50 or older — much lower than 401k plans. Traditional IRA contributions generally function the same way as a 401k: Contributions are deductible, but distributions are taxable. Your contribution deductions might be limited, however, if you or your spouse have access to an employer-sponsored plan, like a 401k.
  • Roth IRAs: You can contribute to a Roth IRA if your income doesn’t exceed the annual limits, which vary depending on your filing status. Roth IRAs work the opposite of 401ks for tax purposes: Your contributions don’t reduce your taxes today, but qualified distributions, including earnings, come out completely tax-free. Contribution limits for Roth IRAs are cumulative with your traditional IRA contributions — each dollar you contribute to one reduces the amount you can contribute to another.
  • Bonds: Bonds are regarded as a safe investment because they’re considered to be like a stable savings account. Bonds earn interest at the rate offered at the time of purchase.

The Choice Is Yours: 401k vs. Roth 401k — Which Is Best for Your Retirement?

Increasing 401k Savings

Aside from starting early and increasing your payroll deductions to maximize your 401k contributions, here are a few more ways to add to your 401k:

  • Take advantage of employer matching.
  • Increase your contribution with every raise you get.
  • Consistently monitor your accounts and make beneficial adjustments.
  • Consider higher risk investments, such as stocks, if you’re in the early stages of your career or need to catch up.

Planning Ahead With Your 401k

When saving for retirement, start as early as possible, but know that it’s never too late to begin. Although you can’t boost your account by making a lump sum 401k contribution whenever you like, you might be able to increase your paycheck contributions, make catch-up contributions or use other methods to increase your balance. If you can’t use one of these methods to boost your balance or you don’t have access to a 401k account, IRA accounts or bonds should be your next choices.

Up Next: Saving for Retirement Is Not a Priority for 40% of Americans

Ashley Eneriz contributed to the reporting for this article.