US 401(k) Calculator

About US 401(k) Calculator

How 401(k) Contributions Work

A 401(k) is a workplace retirement plan where you contribute pre-tax dollars from your paycheck. Your employer may match a portion of your contributions. The money grows tax-deferred until you withdraw it in retirement, when it is taxed as ordinary income.

Worked example: $80,000 salary, 10% contribution, employer matches 50% of the first 6%:

• Your annual contribution: $80,000 x 10% = $8,000
• Employer match: 50% of 6% of salary = 50% x $4,800 = $2,400
• Total annual going into the 401(k): $10,400
• The employer match is a 30% instant return on your $8,000 contribution

2026 IRS Contribution Limits

The IRS raised the employee deferral limit to $24,500 for 2026, up from $23,500 in 2025 (IRS Notice 2025-67, announced November 2025).

Age	Employee Limit	Catch-Up	Total Employee Max
Under 50	$24,500	$0	$24,500
50 - 59	$24,500	$8,000	$32,500
60 - 63	$24,500	$11,250	$35,750
64+	$24,500	$8,000	$32,500

The enhanced catch-up for ages 60-63 ($11,250 vs $8,000) was introduced by the SECURE 2.0 Act and took effect in 2025. The combined employer + employee contribution limit (Section 415(c)) is $72,000 for under 50, or higher with catch-up. Starting in 2026, a new SECURE 2.0 rule requires that catch-up contributions be made as Roth (after-tax) if the participant earned more than $150,000 in FICA wages the prior year - so high earners lose the upfront tax deduction on the catch-up portion, though qualified withdrawals become tax-free.

The Power of the Employer Match

The employer match is free money. Not contributing enough to capture the full match is leaving guaranteed returns on the table. According to the Plan Sponsor Council of America's 67th Annual Survey, roughly 98% of 401(k) plans offer some form of matching contribution, and the most common formula is 50% of the first 6% of pay.

Match Formula	Your 6% Contribution on $80K	Employer Match	Effective Return
50% of first 6%	$4,800	$2,400	50% instant
100% of first 3%	$4,800	$2,400	50% instant
100% of first 4%	$4,800	$3,200	67% instant
100% of first 6%	$4,800	$4,800	100% instant
$1 for $1 up to 5%	$4,800	$4,000	83% instant

A 100% match on 6% doubles your contribution immediately. Even a 50% match gives you a 50% guaranteed return. No investment can compete with this. Note that employer match always flows into the pre-tax traditional bucket, even if your own contributions go to the Roth side.

Vesting and Why It Matters

Employer match money is yours once it is vested. Vesting schedules fall into three common forms: immediate (your match is yours from day one), cliff (fully vested after 3 years, nothing before), and graded (20% per year over 5 or 6 years). Your own contributions are always 100% vested immediately. According to Vanguard's How America Saves 2025 report, about 47% of plans vest match contributions immediately, while the remainder use a 3-year cliff or graded schedule. If you leave a job before vesting, you forfeit the unvested portion of the match - this is a real cost of job-hopping early in your career.

How Your 401(k) Grows Over a Career

Starting at age 25 with $80,000 salary, 3% annual raises, 10% contribution, 50% match on 6%, 7% returns:

Age	Salary	Balance	Your Contributions (cumulative)	Employer Match (cumulative)	Growth (cumulative)
30	$92,742	$71,210	$43,291	$15,585	$12,334
35	$107,513	$179,862	$94,963	$34,187	$50,712
40	$124,623	$340,178	$156,918	$56,491	$126,769
45	$144,445	$574,503	$231,380	$83,297	$259,826
50	$167,412	$910,289	$320,985	$115,555	$473,749
55	$194,021	$1,395,312	$428,986	$154,435	$811,891
60	$224,863	$2,088,776	$559,404	$201,385	$1,327,987
65	$260,638	$3,078,432	$717,103	$258,157	$2,103,172

By age 65, investment growth ($2.1M) accounts for 68% of the total. Your own contributions ($717K) are just 23%. This is compound interest at work over 40 years. Use the compound interest calculator to run the same projection at different return rates.

The Cost of Not Starting Early

Every year you delay costs more than you might expect:

Start Age	Years Contributing	Your Total Contributions	Balance at 65 (7% return)
25	40	$717,103	$3,078,432
30	35	$560,680	$2,132,456
35	30	$424,387	$1,452,078
40	25	$305,164	$964,521
45	20	$200,436	$614,321

Starting at 25 instead of 35 more than doubles the final balance ($3.1M vs $1.5M), even though you only contribute $293K more. The extra 10 years of compound growth adds $1.6M.

Average 401(k) Balances by Age

Fidelity's Q4 2024 retirement analysis (published February 2025, covering 24 million 401(k) participants) shows how real account balances compare by age group:

Age Group	Average Balance	Median Balance
20s	$14,900	$5,800
30s	$52,700	$22,100
40s	$130,500	$49,800
50s	$249,500	$89,700
60s	$271,800	$92,700

Median balances are far lower than averages because a small number of high-balance accounts pull the average up. The gap between median and average is a better reality check than headline retirement-savings figures.

401(k) vs Roth 401(k)

Many employers now offer a Roth 401(k) option alongside the traditional:

	Traditional 401(k)	Roth 401(k)
Contributions	Pre-tax (reduces current taxable income)	After-tax (no current deduction)
Growth	Tax-deferred	Tax-free
Withdrawals	Taxed as ordinary income	Tax-free (if qualified)
Employer match	Goes into traditional bucket	Match goes into traditional bucket
RMDs	Required at 73	None (after SECURE 2.0, starting 2024)
Best when	High tax bracket now, lower in retirement	Lower bracket now, higher later

What to Do After Maxing Your 401(k)

If you can contribute beyond the 401(k) limit, the typical priority order is:

1. Contribute enough to 401(k) to get full employer match
2. Max out Roth IRA ($7,500 in 2026, or $8,500 if 50+)
3. Return to 401(k) and contribute up to the limit
4. HSA if eligible ($4,400 single / $8,750 family in 2026)
5. Taxable brokerage account

To plan your Roth IRA alongside the 401(k), the Roth IRA calculator projects tax-free growth. For overall retirement readiness including Social Security income, use the retirement calculator.

How Fees Quietly Shrink Your Balance

A 1% difference in annual fund fees looks tiny, but over a career it dwarfs most other decisions. The Department of Labor's "A Look at 401(k) Plan Fees" brochure uses this example: a $25,000 starting balance growing at 7% for 35 years reaches $227,000 with 0.5% fees but only $163,000 with 1.5% fees. That 1-percentage-point gap removes $64,000 - 28% of the total.

Annual Fee	$25K after 35 years (7% gross)	Cost vs 0.10% fee
0.10%	$259,113	baseline
0.50%	$226,891	-$32,222
1.00%	$191,941	-$67,172
1.50%	$162,412	-$96,701

Check each fund's expense ratio on the plan's Summary Plan Description or fund fact sheet. Index funds and target-date index funds typically charge 0.03-0.15%. Actively managed funds run 0.50-1.20%. Over 35 years, picking the cheaper option can pay for several years of retirement.

Early Withdrawal Rules and Penalties

Withdrawing from a 401(k) before age 59.5 normally triggers ordinary income tax plus a 10% federal penalty, and often state taxes on top. The IRS lists specific exceptions (SEPP/72(t) substantially equal payments, disability, medical expenses above 7.5% of AGI, qualified birth or adoption up to $5,000, domestic abuse up to $10,000 under SECURE 2.0, federally declared disaster up to $22,000, and the "Rule of 55" if you separate from service in or after the year you turn 55). Hardship withdrawals are still taxed and penalised except where those exceptions apply. Treat the 401(k) as untouchable until retirement - the tax cost of an early withdrawal often erases the reason you took it.

Common 401(k) Mistakes

• Not contributing enough for the full match. Every dollar of match you miss is an immediate 50-100% return you forfeited.
• Cashing out when changing jobs. Early withdrawals before 59.5 trigger income tax plus a 10% penalty. Roll the balance into an IRA or the new employer's plan instead.
• Borrowing against the balance. 401(k) loans feel cheap, but the borrowed amount stops compounding - and if you leave the job, the outstanding balance often becomes due within 60 days or gets treated as a taxable distribution.
• Target-date funds without checking the expense ratio. Some target-date funds charge 0.70%+ per year, which can cost six figures in lifetime returns compared to a 0.08% index fund.
• Ignoring the Roth option. Younger earners in lower brackets often benefit more from the Roth 401(k), where decades of growth come out tax-free.

Is a Million Dollars Enough to Retire On?

A $1 million 401(k) sounds like a lot, but under the common 4% safe-withdrawal rule (Bengen 1994, later refined by the Trinity Study), it produces about $40,000 in year-one retirement income. Layered with the average Social Security benefit of roughly $1,980/month (Social Security Administration, January 2025, approximately $23,760/year), a millionaire retiree is looking at around $63,000/year in combined gross income - closer to middle-income than wealthy once federal and state taxes are paid. Morningstar's 2024 research suggests the sustainable rate has drifted closer to 3.7% because of higher starting valuations and longer retirements, meaning $1M supports about $37,000/year. To get closer to a $100,000/year retirement without counting on Social Security, most planners target $2.5M-$3M saved by age 65.

All calculations run in your browser. No personal or financial data is stored or sent anywhere.

Sources

• IRS - 401(k) limit increases to $24,500 for 2026
• IRS Notice 2025-67 - 2026 retirement plan limits
• IRS - 401(k) and profit-sharing contribution limits
• SECURE 2.0 Act of 2022 (H.R. 2954)
• Fidelity Q4 2024 Retirement Analysis
• Vanguard - How America Saves 2025
• PSCA 67th Annual Survey of Profit Sharing and 401(k) Plans
• U.S. Department of Labor - A Look at 401(k) Plan Fees