401(k) Calculator
Model your 401(k) contributions, employer match, and tax savings for 2025 or 2024. See how your retirement savings grow over time with compound returns, and understand the real after-tax cost of your contributions.
Your Contribution
$6,000/yr
Employer Match
$3,000/yr
Annual Tax Savings
$1,320
Effective Cost
$4,680/yr
$914,978
| Without 401(k) | With 401(k) | |
|---|---|---|
| Federal Income Tax | $13,614 | $12,294 |
| Annual Tax Savings | $1,320 |
Frequently Asked Questions
What is the 401(k) contribution limit for 2025?
For 2025, the employee elective deferral limit for 401(k) plans is $23,500. If you are age 50 or older, you can make an additional catch-up contribution of $7,500, bringing your total employee limit to $31,000. The combined employee plus employer contribution limit is $70,000 for 2025 ($77,500 with catch-up).
How does employer matching work?
An employer match is free money your company contributes to your 401(k) based on how much you contribute. A common formula is a 50% match on the first 6% of your salary, meaning if you earn $100,000 and contribute 6% ($6,000), your employer adds $3,000. You should always contribute at least enough to capture the full employer match.
What is the tax benefit of a 401(k)?
Traditional 401(k) contributions reduce your taxable income in the year you make them, so you pay less in federal and state income tax now. Your investments then grow tax-deferred until withdrawal in retirement, when distributions are taxed as ordinary income. If you expect to be in a lower tax bracket in retirement, this deferral can result in significant lifetime tax savings.
Should I max out my 401(k)?
Maxing out your 401(k) is generally a strong move if you can afford it, especially if you are in a high tax bracket and want to reduce current taxable income. However, prioritize capturing your full employer match first, then consider paying off high-interest debt or funding a Roth IRA for tax diversification before contributing beyond the match. Your ideal contribution level depends on your overall financial situation and retirement timeline.