401(k) Calculator

The employee limit is $24,500 for 2026 (IRS Notice 2025-67). Workers 50 and older can add an $8,000 catch-up — and thanks to SECURE 2.0, those aged 60–63 get an enhanced $11,250 catch-up instead. The combined employee-plus-employer cap is $72,000.

A typical formula is “50% of contributions up to 6% of salary”: contribute 6% and your employer adds 3% of your salary. It's an immediate 50% return before any market growth — which is why the universal advice is to contribute at least enough to capture the full match.

After capturing the full match, it depends on your situation: high-interest debt usually beats extra contributions; otherwise the 401(k)'s tax deferral and automatic investing make it a strong default. Many savers aim for 10–15% of salary including the match.

Traditional contributions skip tax now and are taxed at withdrawal; Roth contributions are taxed now and withdraw tax-free. Rule of thumb: if you expect a higher tax rate in retirement than today, Roth wins; if lower, traditional wins. Splitting between both hedges the uncertainty.

You keep every dollar you contributed plus vested employer money. You can leave it, roll it into the new employer's plan, or roll it into an IRA — rollovers preserve the tax shelter. Cashing out triggers income tax plus a 10% penalty before age 59½ and sacrifices decades of compounding.