Saving is good, but there probably needs to be more in the 401(k) to retire

401k box full of paper money

Your 401(k) might be lacking retirement ready status because you’re not contributing enough. A Vanguard survey finds about one-third of Americans with a 401(k) are contributing four percent or less of their paychecks each month.

“Not only is four percent so inefficient and not enough, but even 10 percent is not enough,” said financial wealth advisor Rebecca Walser.

If you keep at 401(k), consider a substantial increase. IRA contribution limits are lower with more investment choices. Also, money is taxed when you earn it, you don't pay any taxes on it when you take it out.

You don't pay any taxes on money in the 401(k) until you withdraw it from the account.

Walser said normally the adage is don't pay the taxes now while you're working and making more, pay them when you're retired and in a lower tax bracket.

However, because with the 2017 tax reform, this is currently the lowest taxes since 1933, in the history of the tax code.

“The best thing that anybody can do in 2018, is to do a Roth conversion. Anybody that [sic] has pre-tax wealth in a 401(k) or an IRA, can convert that money to a Roth, without a penalty,” said Walser.

She said a Roth IRA is the way to go, even if you are younger than 59 and a half, just pay the tax at the current low rates.

Tax policy is determined by two major things: the federal debt is currently at $21.4 trillion and retirement of Baby Boomers which will start en masse in 2022. Taxes will have to go up substantially in the next 10-15 years.

Don’t forget inflation. The cost of living will go up by the time you retire.

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