US 401(k) Retirement Calculator

US 401(k) Guide

What's the key thing to understand about 2025 Contribution Limits?

401(k) employee contribution limit 2025: $23,500. Catch-up contribution if age 50+: additional $7,500 (total $31,000). New for 2025: catch-up for ages 60-63 is $11,250 (instead of $7,500) under SECURE 2.0 Act. Employer match does NOT count toward the $23,500 limit — it's a separate $46,000 combined limit. Most people don't contribute the max — the median 401(k) contribution rate is 7-8% of salary. Best practice: contribute AT LEAST enough to get full employer match (free money), then increase 1% your own contribution rate by 1% each year until you reach the annual limit.

What's the difference between Roth and Traditional 401(k)?

Traditional 401(k): contribute pre-tax, money grows tax-deferred, withdrawals in retirement taxed as ordinary income. Reduces current year taxable income. Best when current tax bracket is HIGH and you expect to be in a LOWER bracket in retirement. Roth 401(k): contribute post-tax, money grows tax-free, withdrawals in retirement are tax-free. Doesn't reduce current taxable income. Best when current tax bracket is LOW and you expect to be in a HIGHER bracket in retirement. Young workers often benefit most from Roth contributions, since their current tax bracket tends to be lower than what they're likely to face once income and tax rates rise later in their careers.

What do I need to know about Employer Match — The Most Important Rule?

Always contribute enough to capture the full employer match. Common match structures: 50% of contributions up to 6% of salary (most common — equals 3% additional from employer). 100% of contributions up to 3% of salary. 100% on first 3% + 50% on next 2%. Calculating the real value: at $75,000 salary with 50% match on first 6%, you contribute $4,500/year, employer contributes $2,250/year. Over 35 years at 7% return, that $2,250/year of employer money grows to approximately $311,000. By contrast, an employee who contributes nothing forfeits that entire match permanently — it's effectively free money left on the table with no way to claim it retroactively.

What do I need to know about The 4% Rule and Retirement Withdrawals?

The Trinity Study (1998, updated regularly) suggests that retirees can safely withdraw 4% of their starting portfolio in year one, adjusting for inflation each year, with 95%+ probability of the money lasting 30 years. Translation: every $1 million in retirement savings provides approximately $40,000/year sustainable income. A 25-year-old saving $500/month at 7% reaches $1.2M by 65 — providing $48,000/year retirement income, supplementing Social Security, which averages around $24,000/year, and any other retirement income sources like a pension or part-time work.

Why the Employer Match Is the Single Highest-Return Decision Most Workers Will Make

A typical employer match — for example 50% of contributions up to 6% of salary — is effectively free money added to your retirement account purely for contributing your own money first. Failing to contribute enough to capture the full match means walking away from guaranteed compensation that no investment in the market can reliably replicate; a 50% match is an instant 50% return on the matched dollars before any market growth even begins. For this reason, nearly all financial guidance places "contribute enough to get the full match" above almost every other financial priority, including some debt repayment, except perhaps high-interest credit card debt.

Traditional vs. Roth 401(k): Paying Tax Now or Later

A traditional 401(k) contribution is made pre-tax, lowering your taxable income today, with withdrawals in retirement taxed as ordinary income. A Roth 401(k) contribution is made with after-tax dollars today, with qualified withdrawals in retirement completely tax-free, including all the growth. The traditional choice tends to favor people who expect to be in a lower tax bracket in retirement than they are now — common for high earners during peak working years — while Roth tends to favor younger workers in lower tax brackets now who expect higher income, and therefore higher tax rates, later in their careers. Because nobody can predict future tax rates with certainty, many financial planners suggest splitting contributions between both types to hedge against that uncertainty, where the plan allows it.

What Happens to Your 401(k) When You Change Jobs

Leaving a job doesn't mean losing a 401(k) balance, but it does require an active decision about where that money goes next, and the choice matters for fees and future tax treatment. The simplest option is often leaving the balance with the former employer's plan, if the plan allows it and the balance meets any minimum, though investment choices and fees are then fixed by a plan the saver no longer has influence over. Rolling the balance into a new employer's 401(k), when permitted, keeps everything in one place and preserves certain protections, while rolling it into an IRA typically opens up a far wider range of investment options and often lower fees, at the cost of losing some 401(k)-specific protections like certain creditor protections and the ability to take loans against the balance. Cashing out is usually the costliest choice for anyone under the standard retirement withdrawal age, since the distribution is taxed as ordinary income and typically incurs an additional early withdrawal penalty on top, meaningfully eroding what took years to build. Employer matching contributions may also be subject to a vesting schedule, so leaving before being fully vested can mean forfeiting part of the match itself, not just facing a decision about where the vested balance goes.

Worked Example: Match, Compounding and the Cost of Waiting

Someone earning $70,000 a year contributes 6% of salary ($4,200/year) to their 401(k), and their employer matches 50% of contributions up to 6% of salary, adding $2,100/year. That's $6,300/year going in, of which $2,100 is essentially free money that isn't counted toward the employee's own contribution limit. Assuming a long-run average annual growth rate of around 7% (a common planning assumption, not a guarantee), contributing that $6,300/year consistently for 30 years grows to roughly $630,000 in nominal terms, compared to about $420,000 if the employer match were skipped entirely by contributing below the match threshold. Delaying the start by just 5 years, even while contributing the same annual amount for the remaining 25 years, cuts the ending balance by well over $150,000 — the cost of lost compounding time is usually larger than people expect, which is why starting early matters more than optimizing the exact contribution percentage later.

Typical 401(k) Contribution Limit Categories

The IRS adjusts 401(k) contribution limits most years for inflation, so any specific dollar figure should be treated as a snapshot rather than a fixed rule — always check the current year's limits directly with the IRS or your plan provider before relying on a number.

Because these figures move most years, treat any number you see in an older article — including earlier guidance on this very calculator — as potentially stale, and confirm the current-year limit before finalizing contribution elections.