401(k) Contribution Calculator

Last updated July 2, 2026

The 401(k) is the primary retirement savings vehicle for most American workers, and its tax-advantaged structure makes it significantly more powerful than a comparable taxable investment account. In 2026, the employee deferral limit is $24,500 — up from $23,500 in 2025 — with an additional $8,000 catch-up contribution for those 50 to 59 and 64 and older, and a SECURE 2.0 super catch-up of $11,250 for those ages 60 to 63. The combined employer and employee limit is $72,000. The tax math on a traditional 401(k) contribution is immediate and concrete: a $10,000 pre-tax contribution by someone in the 22 percent federal bracket reduces current-year federal income tax by $2,200, effectively making the net cost of the $10,000 contribution only $7,800 after the tax savings.

The employer match is free money that should be captured in full before any other financial priority — it represents an immediate 50 to 100 percent return on contribution depending on the match formula, guaranteed regardless of market performance. Most plans match 50 cents to one dollar per dollar contributed, up to 3 to 6 percent of salary. Failing to contribute at least enough to capture the full match is leaving guaranteed return on the table. For employees who can contribute beyond the match, the decision between pre-tax traditional contributions (taxed at future withdrawal) and Roth contributions (taxed now, withdrawn tax-free) depends on the comparison between current marginal rate and expected future effective rate — the same analysis as the Roth versus traditional IRA decision.

Contribute at least enough to your 401(k) to capture the full employer match — this is the single highest-return financial action available to most employees. Then model what contributing an additional 1 to 3 percent of salary does to your projected retirement balance over 20 or 30 years. At 7 percent compound growth, an extra $2,000 per year invested at age 35 adds approximately $189,000 by age 65.