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Your annual contribution
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Projected balance at retirement
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Year-by-Year Projection
| Year | Age | Contribution | Match | Growth | Balance |
|---|
Calculator assumptions & IRS 2026 limits
IRS 2026 elective deferral limits applied per year (official sources: IRS IR-2025-111, Nov. 13, 2025; IRS Notice 2025-67):
- Under age 50: $24,500 standard limit.
- Ages 50–59 and 64+: $32,500 total ($24,500 standard + $8,000 catch-up).
- Ages 60–63: $35,750 total ($24,500 standard + $11,250 "super" catch-up under SECURE 2.0).
How the projection works (simplifying assumptions, not personalized advice):
- Compounding is calculated once per year at the expected annual return; contributions and match are credited at year-end.
- Your input contribution (percentage of salary, or a fixed dollar amount) is clamped each year to the IRS limit for your age during that year; the "Contribution" column shows the clamped amount.
- Employer match per year = salary × min(match %, match cap %).
- Assumption: the match never exceeds your contribution that year.
- Assumption: age eligibility uses the age you reach at the end of each projection year (aligned with the IRS "attains age" rule).
- Assumption: salary, return rate, and limits stay constant; no raises, no payroll timing, no taxes, no fees, no RMDs. Limits above are 2026 figures held constant for all projection years.
- Assumption: the plan follows the standard 2026 limits shown above (the page does not model per-plan limits or the $72,000 total annual-additions test).
If your retirement age is not later than your current age, the projection runs 0 years and your current balance is shown unchanged.
401k Basics
A 401(k) is an employer-sponsored retirement savings plan that allows you to save and invest a portion of your paycheck before taxes are taken out (Traditional 401k) or after taxes (Roth 401k). Contributions grow tax-deferred or tax-free, respectively, until withdrawal in retirement.
Key has:
- Tax advantages: Contributions reduce your taxable income (Traditional) or grow tax-free (Roth).
- Employer match:: free money you should never leave on the table.
- Contribution limits (2026): $24,500 for those under 50; $32,500 for those 50+ (including catch-up). Limits are adjusted annually for inflation.
- Investment options: Most plans offer a range of mutual funds, target-date funds, and ETFs. You choose how your money is invested.
- Portability: When you change jobs, you can roll your 401k into an IRA or your new employer's plan.
Pro tip: Always contribute enough to get your full employer match before contributing to other accounts. A typical match of 4% with a $75,000 salary means $3,000/year in free money.
Roth 401k vs. Traditional 401k
Most employer plans now offer both a Traditional 401k and a Roth 401k option. The choice depends on your tax situation now vs. in retirement.
| Feature | Traditional 401k | Roth 401k |
|---|
| Contributions | Pre-tax (deductible now) | Post-tax (no deduction now) |
| Growth | Tax-deferred | Tax-free |
| Withdrawals | Taxed as ordinary income | Tax-free (if qualified) |
| Required Minimum Distributions (RMDs) | Yes, starting at age 73 | Yes (Roth 401k has RMDs; Roth IRA does not) |
| Best for | Higher earners who expect lower tax rates in retirement | Younger workers who expect higher tax rates in retirement |
| Income limits | None | None (unlike Roth IRA) |
General rule of thumb: If you're in a lower tax bracket now than you expect to be in retirement, contribute to a Roth. If you're in a higher bracket and expect lower income later, Traditional may be better. Many people split contributions between both.
Pro tip: A Roth 401k can be especially valuable for younger workers decades from retirement, as decades of tax-free compounding can dramatically outweigh the upfront tax cost.
Catch-Up Contributions (Age 50+)
If you're age 50 or older, the IRS allows you to make additional "catch-up" contributions beyond the standard 401k limit. This is designed to help you accelerate your savings as retirement approaches.
- Standard limit (2026): $24,500
- Catch-up contribution (2026): An additional $8,000
- Total limit for 50+ (2026): $32,500
Since 2025, the SECURE 2.0 Act provides an even higher catch-up limit for those aged 60 - 63: $11,250 for 2026.
Pro tip: If you're 50+, this calculator automatically factors in catch-up contributions when your current age is 50 or older. The catch-up is calculated as an additional flat amount ($8,000/yr) on top of your regular percentage-based contribution.
Early Withdrawal Penalties
Withdrawing money from your 401k before age 59½ generally triggers significant penalties and taxes:
- 10% early withdrawal penalty on the amount withdrawn (with some exceptions).
- Ordinary income tax:
- Between federal and state taxes plus the penalty, you could lose 30 - 50% of your withdrawal to taxes and fees.
Exceptions to the 10% penalty (penalty waived, but income tax still applies for Traditional 401k):
- Separation from service in or after the year you turn 55 (Rule of 55).
- Total and permanent disability.
- Medical expenses exceeding 7.5% of your adjusted gross income.
- Substantially equal periodic payments (72(t) SEPP).
- Birth or adoption (up to $5,000, penalty-free).
- Qualified emergency expenses (SECURE 2.0, up to $1,000/year).
⚠ Warning: Cashing out your 401k when changing jobs is one of the most costly financial mistakes you can make. Roll over your 401k to an IRA or your new employer's plan instead.