401K Calculator
See how your retirement savings can grow
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Maximizing Your 401K: The Ultimate Retirement Savings Tool
Employer Match is Free Money
If your employer matches 50% up to 6% of salary, contribute at least 6%. On a $75,000 salary, that is $2,250 in free employer money per year. Over 25 years at 7% return, that match alone grows to over $144,000. Not contributing enough to get the full match is literally leaving money on the table — it is the closest thing to a guaranteed 50-100% return available in personal finance.
2026 Contribution Limits
Traditional vs Roth 401K
Traditional 401(k): Contributions reduce your taxable income now. A $22,500 contribution in the 24% bracket saves $5,400 in taxes this year. You pay taxes on withdrawals in retirement. Best if you expect a lower tax rate in retirement.
Roth 401(k): Contributions use after-tax dollars (no current tax break) but grow and are withdrawn tax-free. Best if you expect a higher tax rate in retirement or want tax diversification. Many advisors recommend splitting between both for flexibility.
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Explore related tools: Retirement Calculator · Roth IRA Calculator · Salary Calculator · Compound Interest Calculator
Written by Finance Experts · Last updated September 2026
Frequently Asked Questions
How much should I contribute to my 401(k)?
At minimum, contribute enough to get the full employer match — it is an instant 50-100% return. Beyond that, aim for 15-20% of gross income. For 2026, the maximum is $23,500 ($31,000 if 50+). Even 3-6% makes a huge difference over decades.
What is an employer match?
Your employer matches a portion of your 401(k) contributions. Common matching: 50% of contributions up to 6% of salary. On a $75,000 salary, that means contributing $4,500 gets you $2,250 in free employer money. Not contributing enough to get the full match is leaving money on the table.
Should I choose Traditional or Roth 401(k)?
Traditional reduces taxable income now but is taxed in retirement. Roth uses after-tax dollars but grows tax-free. Choose Traditional if you expect a lower tax rate in retirement. Choose Roth if you expect a higher rate. Many advisors recommend splitting contributions between both.
What happens if I leave my job with a 401(k)?
You have options: (1) Leave it in the old plan, (2) Roll it to an IRA (more investment options, no fees), (3) Roll it to a new employer's 401(k), or (4) Cash it out (10% penalty + taxes — avoid this). A rollover to an IRA is usually the best choice.
Can I withdraw from my 401(k) early?
Yes, but with penalties. Before age 59½, you pay a 10% early withdrawal penalty plus income taxes. Some plans allow 401(k) loans (up to 50% of balance, max $50K). The only penalty-free exception is the Rule of 55 (separation from service at 55+).
What is the difference between a 401(k) and an IRA?
A 401(k) is employer-sponsored with higher limits ($23,500) and possible employer match. An IRA is individual with lower limits ($7,000) but more investment choices. Max out 401(k) match first, then IRA, then back to 401(k) if you can save more.
How should I invest my 401(k) funds?
Most people should choose target-date retirement funds (set-it-and-forget-it) or a simple mix of low-cost index funds: 80% S&P 500 index + 20% bond index. Check expense ratios — choose funds under 0.20%. Avoid high-fee actively managed funds.
What is the Saver's Credit?
The Retirement Savings Contributions Credit gives low-to-moderate income earners a tax credit of 10-50% of 401(k) contributions (up to $2,000 for singles). It is available to single filers with AGI under $38,000 or married filers under $76,000.
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401(k) vs Roth IRA vs Traditional IRA
Real-World Example: Retirement at 65
- Her contribution: $12,000/year ($1,000/month)
- Employer match: $3,200/year (4% of salary)
- Total annual: $15,200
- At 7% return for 30 years: $1,441,491
Data Sources & Citations
- OfficialSocial Security Administration
- OfficialInternal Revenue Service (IRS)
Disclaimer: Calculators and tools on this site are for informational purposes only and do not constitute financial, tax, legal, medical, or investment advice. Results are estimates and may not reflect actual rates or terms. Consult a qualified professional before making decisions. Privacy Policy
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