What is the 2026 401(k) contribution limit?

For 2026 the IRS employee deferral limit is $23,500 (unchanged from 2025), with an additional $7,500 catch-up for ages 50+ and a SECURE 2.0 'super catch-up' of $11,250 for ages 60–63. The combined employee + employer limit is $70,000 (or $77,500 with catch-up).

How does employer match work?

A typical match is 50% of your contribution up to 6% of salary, or dollar-for-dollar up to 4–5%. For example, if you earn $80,000 and your employer matches 100% up to 4%, contributing $3,200 (4%) gets you another $3,200 free. Always contribute at least enough to capture the full match — it's an instant 100% return.

Should I contribute to a Roth 401(k) or Traditional 401(k)?

Traditional 401(k) contributions are pre-tax (lower your taxes today, taxed at withdrawal). Roth 401(k) contributions are after-tax (no tax break today, tax-free in retirement). Roth typically wins if you expect to be in a higher tax bracket in retirement — common for younger / lower-income earners. Many savers split contributions to hedge.

What rate of return should I assume?

The S&P 500 has averaged ~10% nominal / ~7% real over the last 90 years. For projection purposes, 6–8% nominal is reasonable for a stock-heavy portfolio in your accumulation years. Use 5% if you want a more conservative estimate or are in a balanced 60/40 portfolio.

When can I withdraw from my 401(k)?

Penalty-free withdrawals begin at age 59½. Withdraw earlier and you owe ordinary income tax plus a 10% penalty. Required Minimum Distributions (RMDs) start at age 73 under SECURE 2.0 (rising to 75 in 2033). The Rule of 55 lets you withdraw penalty-free if you separate from your employer in or after the year you turn 55.

💼 401(k) Calculator

Project your 401(k) balance at retirement. Models employee deferrals, employer match, salary growth and the 2026 IRS contribution limits.

Current Age

Retirement Age

Annual Salary ($)

Current 401(k) Balance ($)

Your Contribution (% of salary)

Annual Salary Growth (%)

Employer Match (% of salary)Match cap (e.g. 100% up to 4%).

Expected Annual Return (%)

⚠️ Illustrative only. Returns are not guaranteed. IRS 2026 employee deferral limit $23,500 ($31,000 with age-50+ catch-up; $34,750 with SECURE 2.0 super catch-up at 60–63). Combined employee + employer limit $70,000. Not financial advice.

How a 401(k) Builds Wealth

A 401(k) combines three powerful forces: tax-deferred compounding, free money from your employer, and automatic dollar-cost averaging. Each pay period, a percentage of your salary goes in pre-tax (Traditional) or after-tax (Roth), your employer typically matches part of it, and the whole pot grows tax-free until you withdraw it in retirement.

2026 IRS Limits

Employee deferral: $23,500
Catch-up (50+): +$7,500 → $31,000 total
SECURE 2.0 super catch-up (60–63): +$11,250 → $34,750 total
Combined employee + employer limit: $70,000 (or $77,500 with catch-up)

Capture the Full Employer Match

An employer match is a 100% return on your money the moment it lands. If your employer matches 100% up to 4% of salary and you contribute only 2%, you're leaving half the match on the table. Never skip the match — even if you're paying down high-interest debt, contribute at least enough to capture it.

Traditional vs Roth 401(k)

Both have the same contribution limit. Traditional lowers your taxes today and grows tax-deferred — best if you'll be in a lower bracket in retirement. Roth uses after-tax dollars but withdrawals are tax-free — best if you're in a low bracket now (early career) or expect tax rates to rise. Many savers split contributions 50/50 to diversify their tax exposure.

The Power of Starting Early

Compounding rewards time more than amount. A 25-year-old who saves $500/month at 7% reaches $1.2M by 65. The same person starting at 35 ends with $610K — half. Starting at 45 leaves them with $260K. Time is the single biggest variable in your retirement projection.

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Important Note: Tax rules differ for Roth contributions and Highly Compensated Employees may face additional limits. State income tax treatment varies. For Required Minimum Distribution planning use our RMD Calculator. Always consult a CFP or CPA before major retirement decisions.

Related Calculators

Pension Pot Calculator — UK pension or US 401k retirement-pot projection with employer match and tax relief.
Compound Interest — See how savings grow with daily/monthly compounding.
Retirement Goal Tracker — Are you on track? Projected pot vs. pot needed for your target income.