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/yrEmployer Match
$3,000/yrAnnual Tax Savings
$1,320Effective Cost
$4,680/yr$914,978
| Without 401(k) | With 401(k) | |
|---|---|---|
| Federal Income Tax | $13,449 | $12,129 |
| Annual Tax Savings | $1,320 |
How 401(k) contributions work
2025 contribution limits
Employee elective deferrals: $23,500. Catch-up contribution (age 50+): $7,500. Total including employer: $70,000. Super catch-up (60-63): $11,250.
Tax-deferred growth
Traditional 401(k) contributions reduce your taxable income today. Investment gains grow tax-free until withdrawal, when they're taxed as ordinary income.
Employer match
Most employers match a percentage of contributions (commonly 50% of the first 6%). This is free money — always contribute enough to get the full match.
Roth 401(k) option
Roth contributions are made after-tax but grow and are withdrawn tax-free in retirement. Best if you expect a higher tax rate in retirement.
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.
Sources
Related insights
Use these guides for rule explanations, planning context, and follow-up questions beyond the calculator result.