401(k) Tax Savings Calculator
Calculate how much you save in federal taxes by contributing to a traditional 401(k). Pre-tax contributions lower your taxable income.
📅 Tax Year:
Calculate 401(k) Tax Savings
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2026 max: $24,000
Common: 3-6% of salary
How It Works
Traditional 401(k) contributions are made pre-tax, reducing your taxable income for the year.
2026 Contribution Limits
| Category | 2026 Limit |
|---|---|
| Employee Contribution | $24,000 |
| Catch-Up (Age 50+) | $8,000 |
| Total with Catch-Up | $32,000 |
Tax Savings Formula
Tax Savings = Contribution × Marginal Tax Rate
If you're in the 22% bracket and contribute $10,000, you save approximately $2,200 in federal taxes.
Examples
Example: $85k Salary, $15k Contribution
Without 401k: Taxable ~$70,000 → Tax ~$8,000
With 401k: Taxable ~$55,000 → Tax ~$4,700
Savings:
~$3,300
Frequently Asked Questions
Traditional vs Roth 401(k)?
Traditional 401k: pre-tax contributions now, taxed on withdrawal.
Roth 401k: after-tax contributions, tax-free withdrawals. This calculator shows traditional
401k savings.
Does the employer match count toward the limit?
No. The $24,000 limit is for employee contributions only. Employer
matches are separate and don't count toward your individual limit.
When should I choose Roth instead?
If you expect to be in a higher tax bracket in retirement, Roth may
be better. If you're in a high bracket now, traditional provides more immediate tax savings.
What about state taxes?
In most states, 401k contributions also reduce state taxable income.
Your total savings could be higher than shown here.
How does the catch-up contribution work?
If you're 50 or older by year-end, you can contribute an additional
$8,000 (2026), for a total of $32,000.
Is this free money?
You save taxes now, but pay taxes when you withdraw in retirement.
It's tax deferral, not elimination. However, employer match is essentially free money—always
get the full match!