401k Calculator 2026 — Complete Guide
A 401k is the most powerful retirement savings tool available to US employees. Contributions are pre-tax, employer matches are free money, and everything compounds tax-deferred for decades.
⚡ 401k Quick Reference — 2026
Employee contribution limit$23,500
Catch-up (age 50+)$31,000 total
Super catch-up (age 60–63)$34,750
Total limit including employer$70,000
Early withdrawal penalty (before 59½)10% + income tax
Penalty-free withdrawal age59½
RMD startsAge 73
Most common employer match100% up to 6%
Employer Match — Never Leave Free Money
The most common match is 100% up to 6% of salary. On $80,000 that’s $4,800/year free. Over 30 years at 7% growth, that employer match alone becomes over $450,000. Always contribute at least enough to capture the full match.
The Power of Starting Early
$500/month at 7% from age 25 to 65 = $1.32 million. Same from age 35 = $567,000. A 10-year delay costs $753,000 despite only $60,000 less contributed. Time is the most powerful variable in your 401k.
Traditional 401k vs Roth 401k
- Traditional: Pre-tax contributions reduce taxable income now. Withdrawals taxed in retirement at your then-current rate.
- Roth: After-tax contributions — no deduction now. Growth and withdrawals completely tax-free in retirement.
- Rule: Low bracket now, higher later → Roth. High bracket now → Traditional. When uncertain, split between both.
Can I withdraw from my 401k before retirement?+
Yes, but withdrawals before 59½ incur a 10% penalty plus ordinary income tax. Exceptions include certain hardship withdrawals and the Rule of 55. A 401k loan is often better — you borrow from yourself and repay interest to your own account, with no penalty.
What happens to my 401k if I change jobs?+
Four options: (1) Leave it with old employer if balance over $5,000. (2) Roll into new employer's 401k. (3) Roll into Traditional IRA — widest investment options, no taxes or penalties. (4) Cash out — not recommended due to income tax plus 10% penalty. Rolling into an IRA is usually best long-term.
What should I invest my 401k in?+
For most people under 50: low-cost S&P 500 or total market index funds with expense ratios below 0.20%. Target-date funds automatically rebalance as you approach retirement. Avoid actively managed funds with high fees — a 1% difference in expense ratio costs hundreds of thousands over 30 years.
What is vesting and why does it matter?+
Vesting determines when you own the employer match. Immediate: 100% from day one. Cliff: 0% until a date (usually 2-3 years), then 100%. Graded: earn ownership gradually over 5 years. If you leave before fully vested you forfeit unvested employer contributions. Always check your vesting schedule before resigning.
Frequently Asked Questions
What is the 401k contribution limit for 2026?+
The 401k employee contribution limit for 2026 is $23,500. Workers aged 50+ can contribute an additional $7,500 catch-up for a total of $31,000. Workers aged 60-63 get a new super catch-up of $11,250 under SECURE 2.0, bringing their total to $34,750. The combined employee + employer limit is $70,000.
How much should I contribute to my 401k?+
Step 1: Contribute at least enough to get the full employer match — that's a 100% return. Step 2: Max out a Roth IRA ($7,000 or $8,000 if 50+). Step 3: Return to max the 401k at $23,500. If you can't max everything, prioritize the match first, then Roth IRA, then additional 401k contributions.
Can I have both a 401k and an IRA?+
Yes. You can contribute to a 401k through your employer AND contribute to a Traditional or Roth IRA. The IRA contribution limit is separate from the 401k limit. However, the ability to deduct Traditional IRA contributions phases out at certain income levels if you also have a 401k at work.