Plan your retirement with employer-sponsored 401(k) savings
2026 Limit: $24,500
100% = dollar-for-dollar match
Optional: Add a second tier of employer matching
Annual percentage increase
Investment return rate
Annual inflation rate
A 401(k) is an employer-sponsored retirement savings plan that allows employees to contribute a portion of their salary before taxes are taken out. The money grows tax-deferred until withdrawal in retirement, and many employers match a percentage of your contributions.
Named after section 401(k) of the Internal Revenue Code, these plans are one of the most popular retirement savings vehicles in the United States, offering significant tax advantages and the potential for employer matching contributions.
Maximum: $24,500
Maximum: $31,000 (includes $6,500 catch-up contribution)
Maximum: $72,000
An employer match is when your company contributes additional money to your 401(k) based on your own contributions. This is literally free money and one of the best ways to accelerate your retirement savings.
Always contribute at least enough to get the full employer match - it's an immediate 50-100% return on your investment!
401(k) contributions are made with pre-tax dollars, which means they reduce your taxable income for the year you make the contribution. Your investments grow tax-deferred, and you only pay taxes when you withdraw the money in retirement.
If you earn $75,000 and contribute $7,500 (10%), your taxable income becomes $67,500. At a 22% tax rate, you save $1,650 in taxes that year. Over 30 years, these tax savings compound significantly.
Vesting refers to ownership of employer contributions. Your own contributions are always 100% vested (they're yours). However, employer contributions may be subject to a vesting schedule, meaning you gain ownership gradually over time.
You become 100% vested after a specific period (e.g., 3 years). If you leave before, you forfeit all employer contributions.
You gradually become vested over time (e.g., 20% per year over 5 years).
401(k) funds are intended for retirement, and the IRS imposes rules on when you can access them without penalties.
Generally subject to 10% penalty plus regular income tax. Some exceptions exist for disability, certain medical expenses, or first- time home purchase.
Penalty-free withdrawals, but you'll still pay regular income tax on traditional 401(k) distributions.
Starting at age 73, you must take required minimum distributions (RMDs) from your traditional 401(k). Failure to do so results in a 50% penalty on the amount you should have withdrawn.