401k Calculator

Financial advisors recommend contributing at least enough to get the full employer match — this is essentially free money. Beyond that, aim for 10-15% of your gross salary. The 2026 IRS limit is $23,500 per year ($31,000 if you are 50 or older with the catch-up contribution).

Employer matching means your company contributes additional money to your 401(k) based on how much you contribute. A common structure is 50% match up to 6% of salary — meaning if you contribute 6%, your employer adds another 3%. Always contribute enough to maximize this free benefit.

For 2026, the IRS employee contribution limit is $23,500. Workers aged 50 and older can contribute an additional $7,500 catch-up contribution for a total of $31,000. The total annual limit including employer contributions is $70,000.

A traditional 401(k) uses pre-tax dollars — you get a tax deduction now but pay income tax on withdrawals in retirement. A Roth 401(k) uses after-tax dollars — no deduction now, but withdrawals in retirement are completely tax-free. Choose Roth if you expect to be in a higher tax bracket in retirement.

You can withdraw from your 401(k) without the 10% early withdrawal penalty starting at age 59.5. If you leave your job at age 55 or later, you may access that employer plan penalty-free under the Rule of 55. Required Minimum Distributions (RMDs) begin at age 73.

You have four options: (1) Roll over to your new employer's 401k. (2) Roll over to a traditional IRA — broadest investment options. (3) Leave in the old employer plan if allowed. (4) Cash out — not recommended, triggers income tax plus 10% penalty before age 59.5. Rollovers to IRA or new 401k preserve tax-deferred growth and avoid penalties.

Many employers vest their matching contributions over 3-6 years. If you leave before fully vested, you forfeit unvested employer contributions. For example, in a 4-year graded vesting schedule, you own 25% of employer contributions after year 1, 50% after year 2, 75% after year 3, and 100% after year 4. This calculator models full vesting — subtract unvested amounts if you plan to leave before the schedule completes.

Always contribute enough to capture the full employer match first — that match is an immediate 50-100% return on your contribution. Beyond the match, compare your student loan interest rate vs. expected 401k return. Federal student loans at 5-6% vs. S&P 500 historical ~10%: the math favors 401k contributions. Private student loans at 8-12%: pay those down first, then maximize 401k.