401(k) Calculator

For 2026, employees can contribute up to $23,500 to a 401(k). If you're age 50 or older, you can make an additional $7,500 catch-up contribution, for a total of $31,000. These limits are set by the IRS and generally increase each year with inflation.

Employer matching means your company adds money to your 401(k) based on your contributions. A common match is 50% on the first 6% of your salary - so if you earn $80,000 and contribute 6% ($4,800), your employer adds $2,400. Always contribute at least enough to get the full match - it's an instant 50-100% return on that money.

Traditional 401(k) contributions are pre-tax (you save on taxes now but pay when withdrawing). Roth 401(k) contributions are after-tax (no tax break now, but withdrawals in retirement are completely tax-free). If you expect to be in a higher tax bracket in retirement, or you're early in your career, the Roth 401(k) is often the better choice.

When you leave a job, you have several options: leave the 401(k) with your old employer, roll it over to your new employer's plan, roll it over to an IRA (which gives you more investment options and often lower fees), or cash it out (not recommended - you'll pay income tax plus a 10% early withdrawal penalty if under 59½).

The S&P 500 has historically averaged around 10% per year before inflation. For conservative planning, use 7-8% (accounting for a diversified portfolio and inflation). Target-date funds in 401(k) plans typically hold a mix of stocks and bonds that grows more conservative as you approach retirement.

Early withdrawals before age 59½ trigger a 10% penalty plus ordinary income tax on the amount withdrawn. There are hardship exemptions for specific situations. In 2026, the SECURE 2.0 Act introduced new emergency withdrawal provisions allowing $1,000/year without penalty for personal emergencies.