2026 401(k) contribution limits
Employer matching contributions don’t count toward the employee limit. The calculator caps your contribution at the limit for your age each year. Real limits rise with inflation, so this is conservative.
How employer matching works
A typical formula is “50% of your contributions up to 6% of pay”. If you earn $65,000 and contribute 6% ($3,900), your employer adds $1,950. Contribute only 3% and you get just $975 — the rest of the match is lost. Always contribute at least enough to get the full match; it’s an instant 50–100% return.
Example
A 30-year-old earning $65,000 with $20,000 saved, contributing 6% with that match, 3% raises and 7% returns, reaches about $1.4 million at 65 — around $499,000 in today’s dollars. At 3% the balance is about $809,000.
Traditional vs. Roth 401(k)
- Traditional: contributions reduce your taxable income now; withdrawals are taxed in retirement.
- Roth: contributions are made after tax; qualified withdrawals, including all growth, are tax-free.
If you expect a higher tax rate in retirement, Roth usually wins; if lower, traditional does. Many people split between both.
Related Retirement & Wealth Planning Tools
To construct a comprehensive retirement roadmap, model your total post-career spending needs with our Retirement Calculator, evaluate tax-free distributions using the Roth IRA Calculator, forecast government safety net income via the Social Security Calculator, and see how payroll contributions adjust your net income using the Take Home Pay Calculator.
Frequently asked questions
When can I withdraw from my 401(k) without penalty?
Generally from age 59½. Earlier withdrawals usually owe income tax plus a 10% penalty, with exceptions such as leaving your employer in or after the year you turn 55.
What happens to my 401(k) if I change jobs?
Your own contributions are always yours. Employer contributions may vest over several years. You can leave the money in the old plan, roll it into your new employer's plan, or roll it into an IRA.
Do I have to take required minimum distributions?
Yes, from traditional 401(k)s starting at age 73 (75 for people born in 1960 or later). Roth 401(k)s no longer require distributions during the owner's lifetime.