401(k) Frequently Asked Questions
Clear answers to the most common 401(k) questions on contribution limits, employer matching, Roth vs Traditional strategy, and calculator assumptions.
Contribution Limits
What is the 401(k) contribution limit for 2026?
The 2026 employee elective deferral limit is $24,500. This is the maximum you can contribute from your paycheck. Workers aged 50+ can add catch-up contributions of $8,000 for a total of $32,500.
What is the super catch-up contribution for 2026?
Under the SECURE 2.0 Act, workers aged 60-63 can make a super catch-up contribution of $11,250 (instead of the standard $8,000 catch-up), for a total contribution of $35,750 in 2026.
What is the total 401(k) limit including employer contributions?
The total defined contribution limit (all sources combined: employee contributions, employer match, profit sharing, etc.) is $72,000 in 2026. The compensation cap is $3,60,000.
Can I contribute to both a 401(k) and an IRA in 2026?
Yes! Contributing to a 401(k) does not prevent you from also contributing to an IRA. The IRA contribution limit is $7,000 in 2026 ($8,000 for age 50+). However, deductibility of Traditional IRA contributions may be limited if you (or your spouse) have a workplace plan and income exceeds certain thresholds.
Employer Match
How does employer matching work?
Most employers match a percentage of your contributions up to a cap. The most common formula is "50% of your contributions up to 6% of salary." If you earn $70,000 and contribute 6% ($4,200), your employer adds 50% = $2,100. Always contribute at least enough to get the full match.
What is vesting and how does it affect my employer match?
Vesting refers to when employer contributions become permanently yours. Some plans offer immediate vesting; others use cliff vesting (e.g., 100% at 3 years) or graded vesting (e.g., 20% per year over 5 years). If you leave before full vesting, you forfeit unvested employer contributions.
What if my employer does not offer a 401(k) match?
Many small employers don't offer a match. Without a match, contributing to a 401(k) still offers significant tax benefits. Consider prioritizing a Roth IRA (up to $7,000) after getting any available match, then returning to max out the 401(k) for the tax-deferred growth.
Traditional vs. Roth
What is the difference between Traditional and Roth 401(k)?
Traditional 401(k): Contributions are pre-tax, reducing your taxable income today. You pay income tax when you withdraw in retirement. Roth 401(k): Contributions are after-tax (no immediate tax break). Qualified withdrawals in retirement are completely tax-free, including all the growth.
Which is better — Traditional or Roth 401(k)?
It depends on your tax situation. If you expect to be in a higher tax bracket in retirement than you are now (common for younger/lower-income earners), Roth is often better. If you expect lower taxes in retirement (common for high earners near peak salary), Traditional may win. Many advisors recommend splitting contributions between both.
Can I have both Traditional and Roth 401(k)?
Yes, if your employer plan allows it, you can contribute to both. Your combined contributions across both types cannot exceed the annual limit ($24,500 standard in 2026). This "tax diversification" strategy gives you flexibility to manage taxes in retirement.
Using the Calculator
How accurate is this 401(k) calculator?
Our calculator uses monthly compounding (more accurate than annual), applies 2026 IRS contribution limits automatically, accounts for salary growth, fees/expense ratios, inflation, and the new SECURE 2.0 super catch-up provision. It uses a year-by-year simulation rather than simplified formulas.
What investment return should I use?
The S&P 500 has historically returned ~10% annually before inflation. After inflation, the real return is ~7%. For a diversified portfolio, many planners use 6-8%. The calculator defaults to 7% gross return with 0.5% fees (6.5% net), which is a reasonable moderate assumption.
Can I save and share my calculation?
Yes! Click the "Share" button at the top of the calculator page. It copies a URL with all your inputs encoded as query parameters. Paste that link to share or save your exact scenario. No account or signup is ever required.