2025 and 2026 contribution limits
| Limit | 2025 | 2026 |
|---|---|---|
| Employee contribution (under 50) | $23,500 | $24,500 |
| Catch-up (age 50+) | +$7,500 | +$8,000 |
| Enhanced catch-up (ages 60–63) | +$11,250 | +$11,250 |
| IRA contribution | $7,000 (+$1,000 catch-up) | $7,500 (+$1,100 catch-up) |
Note for high earners: starting in 2026, if your prior-year FICA wages exceeded $150,000 (indexed), age-based catch-up contributions must be made as Roth.
The employer match: the only guaranteed 50–100% return in finance
A typical plan matches 50% of your contributions up to 6% of salary. On a $75,000 salary, contributing 6% ($4,500) earns a free $2,250 every year. Failing to contribute at least to the match cap is leaving part of your compensation unclaimed — before counting decades of compound growth on it.
Why starting early beats contributing more
At a 7% average return, money doubles roughly every 10 years. A dollar invested at 25 doubles four times by 65 (16×); the same dollar at 45 doubles twice (4×). Concretely: $500/month from 25 to 65 grows to about $1.2 million; the same $500/month from 35 reaches only about $570,000. The decade you wait costs more than every dollar you contribute later.
Traditional vs. Roth 401(k)
Traditional contributions skip tax now and are taxed at withdrawal; Roth contributions are taxed now and withdrawn tax-free. Rule of thumb: choose traditional if your current marginal bracket (see the income tax calculator) is higher than the rate you expect in retirement; choose Roth if you're early-career in the 10–12% brackets. Many savers split the difference — and employer matching dollars are always pre-tax regardless.
Assumptions in this projection
Contributions are invested at year-end and grow at your chosen constant return; salary grows at the rate you set; limits use the year selected and add catch-up automatically from age 50 (with the 60–63 enhanced amount). Real markets fluctuate around the average, and IRS limits rise most years — treat results as a planning estimate, not a guarantee.
How this calculator works
The projection grows your current balance plus future contributions and any employer match at your chosen rate of return, compounding each year to retirement. It checks contributions against the 2026 employee limit of $24,500 (plus catch-ups of $8,000 at 50+, or $11,250 at ages 60–63) and shows this year's tax saving from a traditional, pre-tax contribution. Whether pre-tax or Roth is better is covered in 401(k) vs. IRA.
Worked example
Contributing $10,000 a year with a 50%-up-to-6% match on a $90,000 salary adds $2,700 of free employer money annually. At 7% growth over 25 years, the combined contributions compound to well over $800,000 — and each $10,000 pre-tax contribution saves a 22%-bracket worker $2,200 in tax today.
Sources & method: IRS 2026 retirement plan limits; Rev. Proc. 2025-32. See our methodology for how every figure is verified.