Question 1

How much should I contribute to my 401(k)?

Accepted Answer

At minimum, contribute enough to get your full employer match — that's free money with an instant 50-100% return. Financial experts recommend 10-15% of your salary for a comfortable retirement. If you started saving late, aim for 15-20%. The IRS allows up to $23,500 in 2026 (or $31,000 if you're 50+).

Question 2

What is a 401(k) employer match?

Accepted Answer

An employer match is when your company contributes money to your 401(k) based on how much you contribute. A common structure is a 50% match on the first 6% of your salary. So if you earn $100,000 and contribute 6% ($6,000), your employer adds $3,000. That's an instant 50% return before any market gains.

Question 3

What are the 2026 401(k) contribution limits?

Accepted Answer

For 2026, you can contribute up to $23,500 to your 401(k) if you're under 50. If you're 50 or older, you can make an additional catch-up contribution of $7,500, bringing your total to $31,000. Employer matching contributions do not count toward your personal limit.

Question 4

Should I choose a Traditional or Roth 401(k)?

Accepted Answer

A Traditional 401(k) gives you a tax break now — contributions are pre-tax and reduce your current taxable income. A Roth 401(k) gives you a tax break later — contributions are after-tax but withdrawals in retirement are tax-free. If you expect to be in a higher tax bracket in retirement, choose Roth. If you expect a lower bracket, choose Traditional.

Question 5

What is the 4% rule for retirement withdrawals?

Accepted Answer

The 4% rule states you can withdraw 4% of your retirement portfolio in your first year of retirement, then adjust for inflation each year, and your money should last at least 30 years. On a $1 million portfolio, that's $40,000/year or about $3,333/month. It's based on the Trinity Study of historical stock and bond returns.

Question 6

What happens if I withdraw from my 401(k) before age 59.5?

Accepted Answer

Early withdrawals before age 59.5 are subject to regular income tax plus a 10% penalty. On a $10,000 withdrawal in the 22% tax bracket, you'd lose $3,200 to taxes and penalties, keeping only $6,800. There are exceptions: the Rule of 55 (leave your job at 55+), 72(t) distributions, and certain hardship withdrawals.

Question 7

How does compound interest work in a 401(k)?

Accepted Answer

Compound interest means your returns earn returns. If you invest $10,000 and earn 7%, you have $10,700 after year one. In year two, you earn 7% on $10,700 — that's $749, not $700. Over 30 years, a $10,000 investment at 7% grows to about $76,000. The longer your money is invested, the more powerful compounding becomes.

Question 8

Can I have both a 401(k) and an IRA?

Accepted Answer

Yes. You can contribute to both a 401(k) and an IRA in the same year. The 401(k) limit ($23,500 in 2026) and IRA limit ($7,000 in 2026) are separate. However, if you have a 401(k) at work and your income is above certain thresholds, your Traditional IRA contributions may not be tax-deductible. Roth IRA contributions have income limits as well.

401(k) Calculator

Your Numbers

You're Capturing Your Full Employer Match

401(k) Growth Over Time

2026 Contribution Limits

What If You Contributed More?

What If You Maxed It Out?

Tax Savings (Traditional 401k)

Getting the Match — But Can You Do More?

Year-by-Year Breakdown

Get Glen's Musings

Frequently Asked Questions

Tools & books I actually use and recommend

Interactive Brokers

A Random Walk Down Wall Street

The Intelligent Investor

Keep Exploring

401(k) vs IRA

Roth vs Traditional IRA

Retirement Calculator

FIRE Calculator

Millionaire Calculator

Compound Interest Calculator