401(k) Contribution & Growth Calculator

Why a 401(k) costs less than it saves

Traditional 401(k) contributions are deducted from your salary before federal and state income tax. So if you're in the 22% federal bracket and contribute $1,000, your take-home pay only falls by about $780 — the rest would have been paid in tax anyway. On top of that, many employers match a portion of what you put in, which is an immediate, guaranteed return.

Take-home impact = contribution − income tax saved

To see your full net pay after federal, state and FICA taxes, use the paycheck calculator.

401(k) contribution limits: 2025 vs 2026

The deferral limit applies to your own contributions across all 401(k) plans you hold in the same year — it is a per-person limit, not a per-employer one. The combined cap also counts employer match and profit sharing, plus after-tax contributions if your plan allows them.

Get the full employer match first

Before optimising anything else, contribute at least up to your match threshold. Two formulas cover most plans:

• 100% of the first 3%, 50% of the next 2% — you contribute 5%, the employer adds 4%. On a $60,000 salary that is $2,400 a year you cannot get any other way.
• 50% of the first 6% — you contribute 6%, the employer adds 3%, or $1,800 on the same salary.

Watch two details. Vesting decides when match money is really yours — cliff vesting hands it over all at once (often after 3 years), graded vesting releases 20% a year. And if you front-load your contributions to hit the annual limit early, a plan without true-up stops matching for the rest of the year; spreading contributions evenly protects the match.

Traditional or Roth 401(k)?

Traditional contributions cut your taxable income today and are taxed on withdrawal. Roth contributions are made from after-tax pay — your paycheck drops by the full amount — but qualified withdrawals in retirement are tax-free. The calculator above models traditional pre-tax contributions; for a Roth, set the take-home impact equal to the contribution itself.

The rule of thumb: choose traditional when your current marginal rate is higher than the rate you expect in retirement, Roth when it is lower — which is why early-career and lower-bracket savers often favour Roth. Employer match dollars are always pre-tax and land in a traditional bucket, so a Roth saver still ends up with both.

401(k) contribution calculator FAQ

How does a 401(k) affect my take-home pay?

Traditional 401(k) contributions come out of your paycheck before federal and state income tax, so your take-home pay drops by less than the amount you contribute. For example, contributing $300 might only reduce your paycheck by about $220 because the other $80 would have gone to taxes.

How much should I contribute to my 401(k)?

A common starting point is to contribute at least enough to get your full employer match — that's free money. Many advisors suggest working toward 10–15% of your salary over time. Use the slider above to see how each percentage changes your paycheck and tax bill.

What is the 401(k) contribution limit for 2026?

For 2026 the employee deferral limit is $24,500, up from $23,500 in 2025. If you're 50 or older you can add an $8,000 catch-up ($32,500 total), and if you're aged 60 to 63 the enhanced catch-up is $11,250 ($35,750 total). Employer matching sits on top: the combined employee-plus-employer cap is $72,000 in 2026 ($70,000 in 2025).

How does the employer match work?

The most common formula is a 100% match on the first 3% of pay plus 50% on the next 2% — a 4% employer contribution when you put in 5%. Some plans use a flat 50% up to 6%. Match dollars do not count against your $24,500 employee limit, so contributing below the match threshold leaves guaranteed money on the table.

Does a 401(k) reduce Social Security and Medicare taxes?

No. Traditional 401(k) contributions lower your federal and state income tax, but Social Security and Medicare (FICA) taxes are still charged on your full gross wages.

How much will my 401(k) be worth at retirement?

It depends on how much you contribute, your employer match, your years until retirement and your average annual return. The growth projection above compounds your yearly contributions plus match at the return you enter. As a rough example, $7,500 a year (you plus match) at a 7% return for 30 years grows to roughly $760,000 — most of it from compounding, not contributions.

How do I calculate my 401(k) contribution on each paycheck?

Multiply your gross pay for the period by your contribution percentage. For example, 6% of a $2,500 biweekly paycheck is $150. Because traditional contributions are pre-tax, your take-home only drops by about $150 minus the income tax you would have paid on it. The calculator above does this for you and also shows the monthly figure.