401(k) Calculator

How 401(k) Plans Work

A 401(k) is an employer-sponsored retirement account. You contribute pre-tax dollars (Traditional) or after-tax dollars (Roth), and many employers match a portion of your contributions. That match is literally free money — not taking it is leaving thousands of dollars on the table every year.

The most common employer match: 50% of your contribution up to 6% of salary. On a $75,000 salary, that means contribute $4,500 (6%) and your employer adds $2,250. Over 30 years at 7%, just the employer match alone grows to over $200,000.

2026 401(k) Contribution Limits

• Employee limit (under 50): $23,000/year
• Catch-up (age 50+): additional $7,500 = $30,500 total
• Total (employee + employer): $69,000
• Employer match does NOT count toward the $23,000 limit

The Order of Operations for Retirement Savings

1. 401(k) up to employer match — free money, always do this first
2. Pay off high-interest debt — credit cards at 20% beat any investment return
3. Emergency fund — 3-6 months expenses in a high-yield savings account
4. Max out Roth IRA — $7,000/year tax-free growth (Roth IRA Calculator)
5. Back to 401(k) — increase toward the $23,000 limit

Understanding Vesting Schedules

Your own 401(k) contributions are always 100% yours. But employer match money may be subject to a vesting schedule — meaning you have to stay at the company for a set period to keep it. Common structures:

• Immediate vesting: all match money is yours right away
• Cliff vesting: 0% until year 3, then 100%
• Graded vesting: 20% per year, fully vested at year 6

Changing jobs? Check your vesting status first — you might be leaving thousands behind.

Related Tools

Roth IRA Calculator — tax-free growth
Retirement Calculator — overall projection
Salary Calculator — know your take-home pay
Retirement Planning Guide

Frequently Asked Questions