What this calculator shows you
- Employer Match
- Calculate the full value of your employer's matching contribution
- Contribution Limits
- Stay within IRS limits while maximizing savings
- Growth Projection
- See your 401(k) balance at retirement
- Tax Savings
- Understand your current tax benefit from contributions
How 401(k) Plans Work
A 401(k) is an employer-sponsored retirement account that lets you contribute pre-tax dollars, reducing your current taxable income. Your contributions and earnings grow tax-deferred until withdrawal in retirement. Many employers offer matching contributions—essentially free money.
2026 Contribution Limits
For 2026, you can contribute up to $24,500 to your 401(k), or $32,500 if you're 50 or older ($35,750 at ages 60-63). Employer matches don't count toward your limit. The total contribution limit including employer matches is $72,000 ($80,000 for 50+).
Never Leave Free Money on the Table
If your employer matches contributions, contribute at least enough to get the full match. A common match is 50% of your contribution up to 6% of salary. On a $60,000 salary, that's $1,800 in free money annually. Not contributing enough to get the full match is like declining a raise.
Traditional vs Roth 401(k)
Traditional 401(k) contributions are pre-tax now, taxed in retirement. Roth 401(k) contributions are after-tax now, tax-free in retirement. Choose traditional if you expect to be in a lower tax bracket in retirement; choose Roth if you expect higher taxes later or want tax diversification.
Choosing Your Investments
Most 401(k)s offer a selection of mutual funds. Look for low-cost index funds—S&P 500 or total market funds. Target-date funds automatically adjust your allocation as you age. Avoid high-fee actively managed funds unless they have a strong long-term track record.
Questions people ask
How much should I contribute to my 401(k)?
Aim for 15% of income including employer match. At minimum, contribute enough to get the full employer match. If you can't do 15% now, start with the match and increase by 1% each year or with each raise.
What happens if I withdraw early?
Early withdrawals (before 59½) typically incur a 10% penalty plus income taxes, though exceptions exist (leaving your job at 55+, disability, large medical bills). Avoid early withdrawal if possible—you lose both the money and decades of compound growth.
Should I take a 401(k) loan?
Generally no. You repay with after-tax dollars, miss out on investment growth, and if you leave your job, the loan becomes due. Only consider it as a last resort before high-interest debt or hardship.
Education only, not personalized financial, tax or investment advice. Results are estimates based on the numbers you enter; real returns vary and losses happen.