401(k) Contribution Calculator
Project your U.S. 401(k) balance from contribution rate + employer match + assumed annual return. See the full-match minimum and IRS limit guidance. Free.
401(k) Contribution Calculator
⚠ Disclaimer: Estimates only. Not investment advice. RECATOOLS is not a licensed or registered investment adviser in any jurisdiction. Past performance does not guarantee future results. Trading and investing carry risk of partial or total loss of capital.
Enter salary, your contribution rate, your employer's match formula (e.g. "100% of first 6%"), assumed return, and horizon. The tool returns projected balance plus the verdict on whether you're capturing the full employer match — the single highest-leverage check in 401(k) planning.
How to Use the 401(k) Calculator
Enter salary and current balance
Use gross annual salary (pre-tax). Current balance comes from your most recent statement (Fidelity, Vanguard, Empower, Schwab) or the company's HR portal.
Decode the employer match formula
"100% of first 6%" = match-pct 100, match-cap 6. "50% of first 8%" = match-pct 50, match-cap 8. Read your benefits summary plan description (SPD) carefully — match formulas are the second most-confused part of 401(k)s after the vesting schedule.
Pick a realistic return assumption
The tool compounds at whatever rate you enter, once a year, in nominal dollars — it does not choose a return for you. Enter a nominal figure if you want a nominal balance, or a real (after-inflation) figure if you want the answer in today's purchasing power. Run a low and a high case; the spread between them is the honest answer.
Read the verdict bar
If you're contributing below the full-match threshold, the verdict shows exactly how much employer match you're leaving on the table per year. This is the highest-leverage finding the tool can produce — capturing full match should be the #1 priority before any other investing.
401(k) — The US Retirement-Savings Default and Why Match Matters Most
The Three Numbers That Drive Everything
A 401(k) is a US employer-sponsored retirement plan with three numbers that drive 90% of the outcome: contribution rate (what % of salary you defer), employer match (free money the employer adds when you contribute), and investment return (whatever the underlying funds earn). The IRS caps the elective deferral at USD 24,500 for 2026, with a USD 8,000 catch-up for workers aged 50 and over and USD 11,250 for those aged 60–63 (IRS Notice 2025-67). Most workers never reach that cap: in Vanguard's How America Saves 2024 (2023 plan data) the average employee deferral was 7.4% of pay and the median 6.2%.
Of those three, employer match is the only one with an instant 50-100% return. The classic "100% match on first 6%" formula doubles every contribution dollar up to 6% of salary — an immediate 100% return before any investment return. Failing to contribute up to the full-match threshold is the most expensive 401(k) mistake because the forgone money never comes back. For scale, the same Vanguard report puts the average promised employer match at 4.6% of pay (median 4.0%).
Roth vs Traditional vs Mega-Backdoor
Traditional 401(k) contributions are pre-tax — they lower your current taxable income and grow tax-deferred; withdrawals in retirement are taxed as ordinary income. Roth 401(k) contributions are post-tax — they don't lower current income but withdrawals (contributions + growth) are tax-free in retirement. The choice depends on your current vs expected future marginal tax rate: lower-rate now favors Roth, higher-rate now favors Traditional. Workers in the 12% federal bracket should heavily lean Roth; workers in the 32%+ bracket should lean Traditional.
Mega-backdoor Roth is an advanced strategy: contribute up to the total 415(c) limit (USD 72,000 in 2026, less employer contributions) using after-tax non-Roth contributions, then in-plan convert to Roth. It requires a plan that accepts after-tax contributions — 18% of Vanguard-administered plans did at year-end 2023, and 3% of participants with access used them (How America Saves 2024). For high-income workers with capacity beyond the regular USD 24,500 elective limit, mega-backdoor is the highest-leverage tax-advantaged space available in US retirement planning.
Vanguard's How America Saves 2024: the average participant balance at year-end 2023 was USD 134,128 and the median USD 35,286. A mean nearly four times the median is what compounding does to small early-career differences in contribution rate.
The Vesting Trap Most Workers Miss
Employer matching contributions are NOT yours immediately — most plans use a vesting schedule (cliff: 0% until year 3, then 100%; graded: 20% per year over 5 years). If you leave before fully vested, you forfeit the unvested portion. Your own contributions are always 100% vested immediately. Before accepting a competing offer, check your unvested employer-match balance via your 401(k) provider — leaving 1 month before a vesting cliff can cost USD 20-50K of future money. Check the Summary Plan Description (SPD) for your specific schedule.
Why Auto-Escalation Beats Heroic One-Time Decisions
Thaler and Benartzi's "Save More Tomorrow" study (Journal of Political Economy, 2004) found that workers who pre-committed to raising their contribution rate with each pay rise went from saving 3.5% of pay to 13.6% by the fourth pay rise, while most of those asked to raise it immediately declined. The trick is removing the decision friction — you commit once to "escalate 1% every January until I hit 15%" and the plan does the rest. In How America Saves 2024, two-thirds of automatic-enrolment plans had adopted automatic annual increases. Check your plan portal for "automatic increases"; where it is optional, it usually requires an opt-in.
IRS 2026 deferral limits, the 415(c) ceiling and what Vanguard's plan data shows
IRS 2026 limits (Notice 2025-67): USD 24,500 elective deferral; USD 8,000 catch-up at 50+, USD 11,250 at ages 60–63. Section 415(c) total USD 72,000 (employee + employer + after-tax).
The 401(k) name comes from Section 401(k) of the Internal Revenue Code, added in 1978.
Vanguard How America Saves 2024 (2023 data): average employee deferral rate 7.4% of pay, median 6.2%; plan-weighted participation 85%.
The most common employer match: 100% of first 6% of salary. Some employers use 50% of first 6% (cheaper) or 100% of first 3% + 50% of next 2% (Safe Harbor formula).
The average promised employer match was 4.6% of pay and the median 4.0% in Vanguard-administered plans at year-end 2023 (How America Saves 2024).
Vesting can take up to 6 years (Safe Harbor: immediate; cliff: 3 years; graded: 6 years). Unvested employer match forfeited on departure.
The Roth 401(k) option took effect in 2006. 82% of Vanguard-administered plans offered it at year-end 2023, and 17% of participants in those plans used it (How America Saves 2024).
Mega-backdoor Roth: 415(c) limit USD 72,000 minus employee + employer contributions = remaining after-tax space. Only 18% of Vanguard-administered plans accepted after-tax contributions in 2023.
RMDs on Traditional 401(k) start at age 73 (75 for those born in 1960 or later, SECURE 2.0). Designated Roth accounts owe no lifetime RMDs from 2024.
A missed RMD carries a 25% excise tax on the shortfall, reduced to 10% if corrected within two years (IRS RMD FAQs).
Frequently Asked Questions
- At minimum, enough to capture the full employer match. If the match is "100% of first 6%", contribute at least 6%. Anything less leaves free money on the table — typically the single most expensive mistake in 401(k) planning. After that, increase 1% per year (most plans support auto-escalation) until you hit 15% of salary or the IRS cap.
- Rule of thumb: lower current marginal tax rate (12% federal bracket and below) → favor Roth; higher current rate (32%+) → favor Traditional; middle (22-24%) → split or pick based on whether you expect higher or lower retirement income. Many workers split contributions across both for tax diversification. Roth 401(k) contributions don't reduce current taxable income but withdrawals are tax-free.
- Vesting controls when employer match becomes yours to keep on departure. Common schedules: immediate (Safe Harbor plans), 3-year cliff (0% then 100% at year 3), or 6-year graded (20% per year starting year 2). Your own contributions are always 100% vested. Before accepting a competing job offer, check your unvested balance — leaving 30 days before a vesting cliff is one of the most expensive timing mistakes possible.
- If your income allows and you have no higher-priority financial goals (debt at 7%+ interest, emergency fund < 3 months, kids' college savings), then yes — maxing the USD 24,500 limit accelerates retirement security significantly. For high earners whose plan accepts after-tax contributions, the mega-backdoor Roth can use the rest of the USD 72,000 section 415(c) ceiling after your own and your employer's contributions.
- Four options: (1) leave it with the old employer (a plan may force out vested balances up to USD 7,000 — the SECURE 2.0 cash-out limit from 2024; amounts over USD 1,000 must be rolled to an IRA rather than paid in cash); (2) roll over to new employer's 401(k) if they accept incoming rollovers; (3) roll over to an IRA at a brokerage (Fidelity, Vanguard, Schwab) — this gives you the widest investment selection; (4) cash out (pays income tax + 10% early-withdrawal penalty if under 59½ — almost never the right answer). Most planners recommend option 3 for control and lower fees.
- Most plans allow loans up to 50% of vested balance (max USD 50,000), repaid via payroll deduction over 5 years (longer for home purchase). The loan interest goes back into your account — feels free but you're losing the market return on the borrowed amount. If you leave the job, most plans require repayment or treat the outstanding balance as a distribution (a "loan offset"), taxable and subject to the 10% additional tax if you are under 59½. Use as last resort, not for routine cash needs.
- For most workers: a low-cost target-date fund matched to your expected retirement year (e.g. "2055 Fund" for ~30-year horizon) is the right default. It auto-adjusts stock/bond mix as you approach retirement. If your plan offers index funds with lower expense ratios (Vanguard 500 Index, Total Stock Market), those typically beat actively-managed funds over 20+ years per the SPIVA scorecards. Avoid funds with expense ratios above 0.5%.
- Required Minimum Distributions (RMDs) on Traditional 401(k)s start at age 73 (75 for people born in 1960 or later, per SECURE 2.0). Amount is calculated annually by dividing prior-year-end balance by an IRS life-expectancy factor (~24-26 at age 73, falling with age). Roth 401(k) RMDs were eliminated as of 2024. Missing an RMD triggers a 25% excise tax on the missed amount, reduced to 10% if corrected within two years.
- 401(k) has the higher contribution limit (USD 24,500 vs USD 7,500 for an IRA in 2026, per IRS Notice 2025-67) and is the only place to get an employer match. Roth IRA has wider investment selection (any brokerage, no plan-imposed fund list), tax-free withdrawals, no RMDs, and no income limit on Roth conversions (the "backdoor Roth"). Optimal order for most US workers: (1) 401(k) up to full match; (2) Roth IRA up to USD 7,500; (3) back to 401(k) up to USD 24,500; (4) HSA / mega-backdoor / taxable brokerage.
- Generally yes, especially for the employer match. If you eventually leave the US permanently, you can roll the 401(k) to an IRA and either: (a) leave it invested and take distributions in retirement (subject to US tax + your home country's rules); or (b) take an early distribution paying 10% penalty + income tax. Many ASEAN expats keep US 401(k) balances invested long-term because US investment options are deeper and cheaper than home-country equivalents. Consult a cross-border tax CPA for your specific home-country treaty.
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Method & sources
How it computes
Projects a US 401(k) balance as FV = current balance × (1+r)^n + (employee deferral + employer match) × ((1+r)^n − 1)/r with annual compounding, where the employee deferral is capped at the IRS section 402(g) elective-deferral limit for tax year 2026 (USD 24,500, plus the USD 8,000 age-50 catch-up) and the employer match is match% × salary × min(contribution rate, match cap).
What this tool implements
- IRS Notice 2025-67 tax-year 2026 limits: USD 24,500 elective deferral; USD 8,000 catch-up at age 50+; USD 72,000 section 415(c) annual-additions ceiling
- The higher USD 11,250 catch-up for ages 60–63 (SECURE 2.0 §109) is stated on the page but NOT applied by the calculator, which uses USD 8,000 for everyone 50+
- Employer match is modelled as a single-tier formula (X% of every dollar up to Y% of salary); tiered safe-harbour formulas must be approximated
- Annual compounding of a level end-of-year contribution; no salary growth, no vesting, no fees or taxes
Sources
- irs.gov — 401k limit increases to 24500 for 2026 ira limit increases to 7500
- irs.gov — retirement topics 401k and profit sharing plan contribution limits
- irs.gov — retirement plan and ira required minimum distributions faqs
- Vanguard. How America Saves 2024. Vanguard Group; 2024. https://workplace.vanguard.com/content/dam/inst/iig-transformatio…
- Thaler RH, Benartzi S. Save More Tomorrow: Using Behavioral Economics to Increase Employee Saving. Journal of Political Economy 2004;112(S1):S164-S187.
What can make this go out of date
- IRS cost-of-living adjustments to the 402(g), catch-up and 415(c) limits — announced each November for the following tax year (the 2026 figures came in Notice 2025-67, November 2025)
- Vanguard How America Saves — annual (June) participant statistics quoted in the prose
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