401(k) Calculator

In 2026, you can contribute up to $23,500 to a 401(k) — or $31,000 if you're age 50 or older (the $7,500 catch-up contribution). These limits apply only to your contributions; employer match contributions don't count against your limit. The total combined limit (yours + employer) is $70,000 for 2026, or $77,500 with catch-up. Limits typically rise slightly each year.

Most US 401(k) employer matches follow a formula like "50% of your contribution, up to 6% of salary." If you earn $75,000 and contribute 6% ($4,500), your employer adds 50% of that — $2,250. If you contribute only 3% ($2,250), your employer only matches $1,125. To get the full match, you usually need to contribute at least up to the cap. The match is free money — always contribute enough to capture all of it.

Generally yes, if you can afford to. Maxing a $23,500 contribution at the 22% federal tax bracket saves about $5,170 in current taxes. The trade-off is liquidity — you can't easily access the money before 59½ without penalty. A common order of priority: (1) contribute enough to get the full match, (2) max your Roth IRA, (3) come back to max the 401(k), (4) HSA if available, (5) taxable brokerage.

Traditional 401(k) gives you a tax deduction now and you pay taxes on withdrawals later. Roth 401(k) is the opposite — no deduction now, but tax-free withdrawals later. The rule of thumb: traditional if you expect to be in a lower tax bracket in retirement (typical for high earners near the end of their careers), Roth if you expect to be in the same or higher bracket later (typical for younger workers). Many plans now let you split contributions between both.

Yes, but it's expensive. Withdrawals before age 59½ are subject to a 10% early-withdrawal penalty plus regular income tax. There are exceptions: substantial medical expenses, disability, separation from service after age 55, and a few others. The Rule of 55 lets you withdraw without penalty if you leave the job in or after the year you turn 55. Otherwise, treat your 401(k) as untouchable until retirement.

Many plans let you borrow up to 50% of your vested balance (or $50,000, whichever is less). You repay it with interest — but the interest goes back into your account. The risks: if you leave your job, the loan typically becomes due within 60-90 days; if you can't repay, it's treated as an early withdrawal (10% penalty + taxes). 401(k) loans should be a last resort, not a default option.

You have four options: leave it in the old employer's plan (if allowed and the plan is good), roll it over to your new employer's 401(k), roll it to an IRA (gives you the most investment choices), or cash it out (taxes + 10% penalty if under 59½ — almost never the right move). Rolling to an IRA is usually best unless your new 401(k) has unusually low fees and good investment options.

Vesting determines what portion of your employer's contributions you actually own. Your own contributions are always 100% yours. Employer contributions might be subject to a vesting schedule — for example, you might earn 20% per year over 5 years, so you'd need to stay 5 years to own 100% of the match. If you leave early, you forfeit the unvested portion. Check your plan documents to see your vesting schedule.

You have alternatives. A traditional or Roth IRA lets you contribute up to $7,000/year ($8,000 if 50+) with similar tax treatment. A SEP-IRA or Solo 401(k) is great if you have any self-employment income. A health savings account (HSA) — if you have a high-deductible health plan — is the most tax-advantaged account in America. The lack of an employer 401(k) is an obstacle but not a blocker.

Traditional 401(k) contributions are pre-tax — they come out of your paycheck before federal income tax is calculated. If you contribute $10,000 and you're in the 24% bracket, you save $2,400 in current taxes. The money grows tax-deferred (no taxes on dividends or gains while in the account), and you pay regular income tax when you withdraw in retirement. Roth 401(k) doesn't reduce current taxes but produces tax-free withdrawals.