Most of us would agree that contributing as much as possible to your retirement accounts is a good idea. But you may not be in a position to devote the maximum amount to your 401(k) -- $19,500 in 2021 ($26,000 if you're over 50) -- and may be faced with more difficult trade-offs. 

If you're in this boat, it's useful to know some of the best reasons not to max out your 401(k) in 2021. 

1. Your 401(k) comes with higher-than-usual fees

If your employer offers an unnecessarily expensive retirement plan, you might consider contributing up to the match amount and diverting excess funds to other investments. Some plans can come with high administrative fees and a menu of pricy mutual funds; be careful not to overcommit to these plans if you have better options. 

You also have the option of contributing the maximum to the plan and then rolling over the 401(k) to an IRA once you leave your employer. The issue with this is that you probably don't know if and when you'll leave, and the excess fees associated with your retirement plan will take a greater toll the longer you stay. 

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2. You have high-interest personal debt

Carrying high-interest debt outside of a primary mortgage -- like auto loans, credit card debt, and student loans -- can weigh down your net worth as well as your psyche. 

So what's "high-interest" in this context? In my view, if the interest rate on your debt is 4% or lower, diverting more to investments can be a smart idea. If, on the other hand, the interest rate is 6% or higher, the debt should be eliminated as soon as possible. Rates between 4% and 6% can be viewed as in the "gray area."

The feeling of not owing is extraordinarily powerful, so rid yourself of the monthly payments and take care of the expensive debt before prioritizing retirement. 

3. You have an underfunded Roth IRA

Consistently maxing out your Roth IRA every year is one of the most impactful things you can do to ensure you end up with a secure retirement. While the contribution amount isn't particularly generous -- $6,000 for people under 50 and $7,000 for those over 50 -- the benefit of tax-free compounding over a period of decades cannot be understated. 

Most Roth IRAs can be opened at no cost at a discount broker of your choice, and you'll have a wide menu of nearly free investment options from which to choose. 

Consider contributing to your employer plan up to the match, and then making your Roth IRA a priority in 2021. If there are funds left over after that, you might want to go back to the 401(k) plan to add more, but make sure your Roth is completely full by that point. 

4. You need the money for other goals

Perhaps one of your goals is homeownership. If that's you, you'll need enough in cash reserves to make a sizable downpayment, especially in today's real estate market. Money locked in a 401(k) is only of minimal benefit to you when it comes to buying a home you need to live in today. 

Still, contributing to your 401(k) plan up to your employer's matching percentage gives you an immediate 100% return on your money -- so be sure to take advantage if your employer offers a match. 

Beyond the match, however, you could periodically stash excess money in a liquid cash reserves fund with the intent of using it within the next few years. 

Tax-deferred growth in a 401(k) is most definitely a great thing, but don't overdo your contributions if it comes at the expense of more immediate aspirations. 

One size sometimes fits all

Maxing out your 401(k) is a good idea in many circumstances, particularly if you have the funds available to do so. But if you have to make difficult decisions around where the next dollar goes, you certainly aren't alone. Take the time to write down and thoroughly investigate your entire financial situation before overcommitting in any one direction. Moving forward with a plan will not only help you get your finances sorted, but there's a good chance it will also make you feel a lot better.