401k Calculator 2026 — Contribution and Growth Projector

A 50% match is an immediate 50% return on the matched money, before a single day of market exposure. Nothing else available to an ordinary investor competes with that, and it is guaranteed rather than expected.

Put it in context: paying off a credit card at 24% is widely and correctly described as the best guaranteed return in personal finance. A 50% employer match beats it, and a 100% match — dollar for dollar, which many employers offer — doubles your money instantly.

This is why the standard sequencing advice puts capturing the full match before everything, including high-interest debt payoff. The match is time-limited in a way debt is not: contribute nothing this year and this year's match is gone permanently.

The corollary is that contributing above the match cap is a different decision entirely. It is still worthwhile for the tax treatment, but it is ordinary investing rather than free money, and it competes on equal terms with an IRA, an HSA or paying down debt.

The employee limit follows you, not the plan. Someone who contributes $15,000 at one employer and moves to another has $9,500 of room left for the year, and payroll systems at the new employer have no visibility into the old one. Exceeding the limit requires a corrective distribution and creates avoidable tax complications.

Both grow without annual tax. The difference is purely when income tax applies: traditional deducts your contribution now and taxes withdrawals; Roth taxes the contribution now and withdrawals are tax-free.

Mathematically, if your tax rate is identical now and in retirement, the two produce exactly the same spendable result. This is not intuitive but it falls straight out of the arithmetic — multiplication is commutative, so taxing before or after growth gives the same answer at a constant rate.

The decision therefore rests entirely on whether your rate will be higher or lower later. Traditional wins if your retirement rate is lower, which is common for high earners in their peak years. Roth wins if it is higher, which favours people early in their careers, and anyone who believes rates will rise generally.

Two asymmetries tilt the choice beyond the arithmetic. Roth contributions effectively shelter more, because $24,500 of after-tax money is worth more than $24,500 of pre-tax money at the same limit. And Roth balances are not subject to required minimum distributions in the same way, giving more control over taxable income in retirement — which matters for Medicare premium tiers and the taxation of Social Security.

Given that nobody knows future tax rates, holding both is a defensible hedge rather than an indecisive compromise.

Fees compound exactly as returns do, in the opposite direction, and they are the one variable entirely within your control.

A one percentage point difference in annual expenses across a 30-year horizon reduces a final balance by roughly a quarter. On the $1,043,000 example, moving from a 1.0% expense ratio to 0.1% is worth well over $200,000 — considerably more than most people could achieve by better fund selection.

Check two layers: the expense ratios of the funds you hold, and any plan administration fee charged on top. Older plans and those at small employers are frequently the most expensive, and low-cost index options are increasingly available even where the default fund is not one.

The second erosion is cashing out when changing jobs. A withdrawal before 59½ typically incurs income tax plus a 10% penalty, and it removes the balance from decades of compounding. Rolling into an IRA or the new employer's plan preserves both.