401(k) Calculator
Calculate how much tax you save on 401(k) contributions. See the real cost after tax deferral and understand the benefits of employer matching.
Your Details
Common matches: 3%, 4%, 6% (often up to a limit like 50% of first 6%)
401(k) Summary
Tax Benefits
You're saving $990.00 in federal tax by contributing to your 401(k). Your $4,500.00contribution only costs you $3,510.00 after the tax deduction.
Take-Home Pay Comparison
Your federal tax bracket: 0.22%
Understanding 401(k) Tax Benefits
How Traditional 401(k) Works
Traditional 401(k) contributions reduce your taxable income. If you're in the 24% tax bracket, every $100 you contribute saves you $24 in federal taxes. Your money grows tax-deferred until you withdraw it in retirement.
2025 Contribution Limits
You can contribute up to $23,500 to your 401(k) in 2025. If you're 50 or older, you can contribute an additional $7,500(catch-up contribution) for a total of $31,000.
401(k) Tax Savings by Tax Bracket 2025
| Tax Bracket | Income Range (Single) | Tax Savings | $1,000 costs you |
|---|---|---|---|
| 10% | $0 - $11,925 | $100 | $900 |
| 12% | $11,926 - $48,475 | $120 | $880 |
| 22% | $48,476 - $103,350 | $220 | $780 |
| 24% | $103,351 - $197,300 | $240 | $760 |
| 32% | $197,301 - $250,525 | $320 | $680 |
| 35% | $250,526 - $626,350 | $350 | $650 |
| 37% | Over $626,350 | $370 | $630 |
Tax savings shown are federal only. State income tax savings vary by state.
How 401(k) Tax Savings Work
Traditional 401(k) contributions are made with pre-tax dollars, reducing your taxable income. This means you pay less in federal and state income taxes now, while your money grows tax-deferred until retirement.
Traditional vs Roth 401(k)
With a Traditional 401(k), you defer taxes until withdrawal in retirement. With a Roth 401(k), you contribute after-tax dollars, but qualified withdrawals in retirement are completely tax-free. Many employers offer both options, and you can split your contributions between them.
Employer Matching
Many employers match a portion of your 401(k) contributions. Common matching formulas include 50% up to 6% of salary, or dollar-for-dollar up to 3%. Always contribute at least enough to get your full employer match - it's free money that can significantly boost your retirement savings.
Contribution Limits
For 2025, the employee contribution limit is $23,500. If you're 50 or older, you can contribute an additional $7,500 as a catch-up contribution. The total limit including employer contributions is $70,000 ($77,500 with catch-up).
Frequently Asked Questions
How much tax do I save on 401(k) contributions?▼
Traditional 401(k) contributions are made pre-tax, reducing your taxable income. You save at your marginal tax rate. For example, if you're in the 22% bracket, a $1,000 contribution saves you $220 in federal taxes. You also save on state income taxes in most states.
What is the 401(k) contribution limit for 2025?▼
The 401(k) employee contribution limit for 2025 is $23,500. If you are 50 or older, you can make an additional catch-up contribution of $7,500, for a total of $31,000. The total limit including employer contributions is $70,000 (or $77,500 with catch-up).
Should I choose Traditional or Roth 401(k)?▼
Traditional 401(k) contributions reduce your taxable income now, and you pay taxes when you withdraw in retirement. Roth 401(k) contributions are made after-tax, but withdrawals in retirement are tax-free. Choose Traditional if you expect to be in a lower tax bracket in retirement, or Roth if you expect higher taxes later.
How much should I contribute to my 401(k)?▼
Financial advisors often recommend contributing at least enough to get your full employer match (free money). Beyond that, aim for 10-15% of your salary including employer contributions. If you can afford it, maximizing your contribution ($23,500 in 2025) provides the greatest tax benefit.
What is employer 401(k) matching?▼
Many employers match a portion of your 401(k) contributions, such as 50% of contributions up to 6% of salary, or dollar-for-dollar up to 3%. This is essentially free money. For example, if you earn $75,000 and your employer matches 50% up to 6%, contributing $4,500 gets you $2,250 in matching.