Contribute at least enough to get your full employer match, then work up to 15% of your pay, counting the match. In most plans the full match takes about 6% of pay. If 15% is out of reach, raise your rate one point a year. The most you can put in for 2026 is $24,500, or more from age 50.
That is the rule most retirement researchers land on. The rest of this guide turns it into dollars: what each rate costs per paycheck, what it could grow to, how to split the IRS limit across your pay periods, and the match trap that catches people who max out too fast. There is a calculator for your own numbers halfway down.
How much should you contribute to your 401(k)?
Think of it as three steps. Stop at the one your budget allows, and move up when you can.
- Get the full match. Contribute whatever percentage your employer matches up to. Anything less turns down part of your pay. In Vanguard plans, the median deferral needed for the full match was 6% in 2025 (How America Saves 2026).
- Work up to 15% in total. Fidelity's guideline is to save 15% of pretax income each year, including employer contributions (Fidelity, May 2026). With a 3% match, your share is 12%.
- Max it out if you can. The 2026 employee limit is $24,500. Late starters and high earners often need this step to catch up.
For context, the average Vanguard participant deferred 7.6% of pay in 2025 (median 6.6%). With the employer's share, the average total was 12.1%. Only 14% of participants hit the IRS limit. So 15% puts you ahead of most savers, but not out on a limb.
How does a 401(k) employer match work?
A match is money your employer adds when you contribute. It is usually written as "X cents per dollar on the first Y% of pay." Vanguard tracked more than 100 different formulas in 2025. These were the most common:
| Match formula | Share of plans | You contribute | Employer adds |
|---|---|---|---|
| 50% on the first 6% of pay | 12% | 6% | 3% of pay |
| 100% on the first 3%, 50% on the next 2% | 9% | 5% | 4% of pay |
| 100% on the first 6% | 9% | 6% | 6% of pay |
| 100% on the first 5% | 7% | 5% | 5% of pay |
| 100% on the first 4% | 7% | 4% | 4% of pay |
So on a $60,000 salary with the most common formula, you put in $3,600 (6%) and your employer adds $1,800. Drop to 3% and you lose $900 of match a year.
One catch: the match may not be fully yours right away. Your own contributions are always 100% vested. Employer matches can vest over up to three years (all at once) or six years (in steps), according to the Department of Labor. Your summary plan description lists your formula and vesting schedule.
Is 10% enough, or should you save 15%?
Ten percent is a solid start, especially with a match on top. Fidelity's 15% figure assumes you save from about age 25 to 67. Its milestones are 1x your salary by 30, 3x by 40, 6x by 50 and 10x by 67 (Fidelity, Sept 2026).
Adjust the target to your situation:
- Starting in your 20s: 10% plus the match usually lands near 15% total.
- Starting at 35 to 45: plan on 15% or more of your own pay, plus the match.
- 50 and older: catch-up contributions exist for exactly this. Compare your balance with the average 401(k) balance by age to see where you stand.
- A pension or a late retirement date lowers the number you need. Your Social Security full retirement age is a sensible planning date.
How much will my 401(k) be worth at 6%, 10% or 15%?
Here is what three salaries and three contribution rates add up to. The match is the most common formula, 50% on the first 6%. The balances are a hypothetical, not a forecast.
| Salary | Rate | You put in / yr | Per biweekly check | Match / yr | 10 years | 20 years | 30 years |
|---|---|---|---|---|---|---|---|
| $60,000 | 6% | $3,600 | $138 | $1,800 | $71,176 | $198,642 | $426,914 |
| $60,000 | 10% | $6,000 | $231 | $1,800 | $102,810 | $286,928 | $616,654 |
| $60,000 | 15% | $9,000 | $346 | $1,800 | $142,353 | $397,284 | $853,828 |
| $85,000 | 6% | $5,100 | $196 | $2,550 | $100,833 | $281,410 | $604,795 |
| $85,000 | 10% | $8,500 | $327 | $2,550 | $145,648 | $406,481 | $873,593 |
| $85,000 | 15% | $12,750 | $490 | $2,550 | $201,666 | $562,820 | $1,209,590 |
| $120,000 | 6% | $7,200 | $277 | $3,600 | $142,353 | $397,284 | $853,828 |
| $120,000 | 10% | $12,000 | $462 | $3,600 | $205,620 | $573,855 | $1,233,308 |
| $120,000 | 15% | $18,000 | $692 | $3,600 | $284,705 | $794,569 | $1,707,657 |
Two things stand out. First, the match stops at 6%, so the jump from 10% to 15% comes entirely from you. Second, time does most of the work. On $85,000 at 10%, about $331,500 goes in over 30 years. The projected balance is roughly $873,600, and growth supplies the rest.
401(k) contribution calculator
Enter your salary, rate and match formula. The calculator caps your contribution at the 2026 IRS limit for your age and lets you change the return assumption.
Calculator
How much will your 401(k) contribution add up to?
Hypothetical balance in 20 years
$406,481
from $221,000 paid in, at 6% a year
- Your contribution per year
- $8,500
- Per paycheck (26 a year)
- $327
- Employer match per year
- $2,550
- Total going in per year
- $11,050
Your 2026 limit is $24,500. You are using 35% of it.
Hypothetical illustration, not a prediction. Assumes a flat salary, contributions once a year, no fees and a fully vested match. Real returns vary year to year. Limits are the 2026 IRS figures; they rise to $25,500 ($34,000 at 50+, $37,250 at 60 to 63) in 2027.
What are the 401(k) contribution limits for 2026 and 2027?
The IRS sets the limits each fall. The 2027 numbers came out on November 12, 2026 (IR-2026-136).
| Limit | 2026 | 2027 |
|---|---|---|
| Employee contribution (under 50) | $24,500 | $25,500 |
| Catch-up, age 50 and older | $8,000 | $8,500 |
| Total you can put in at 50+ | $32,500 | $34,000 |
| Higher catch-up, ages 60 to 63 | $11,250 | $11,750 |
| Total you can put in at 60 to 63 | $35,750 | $37,250 |
| Total employee + employer limit (excludes catch-ups) | $72,000 | $75,000 |
The employee limit is per person, across every plan you join in the same year. Change jobs mid-year and you must add both plans together. If you go over, ask the plan to return the excess by April 15 of the following year. Otherwise the IRS taxes it twice (IRS contribution limits).
How much per paycheck to max out your 401(k)?
Divide the annual limit by your number of paychecks:
| Pay schedule | Under 50 ($24,500) | 50+ ($32,500) | 60 to 63 ($35,750) |
|---|---|---|---|
| Every two weeks (26) | $942.31 | $1,250.00 | $1,375.00 |
| Twice a month (24) | $1,020.83 | $1,354.17 | $1,489.58 |
| Monthly (12) | $2,041.67 | $2,708.33 | $2,979.17 |
Most plans take a percentage, not a dollar amount. Divide the limit by your salary and round down. On $120,000, maxing out takes 20.4%, so set 20%. A $200,000 earner reaches the limit at about 12.25%.
The front-loading trap
Many employers match each paycheck, not the year. Hit $24,500 by September and your contributions stop. So does the match for the last few months. Some plans fix this with a year-end "true-up" deposit, and some do not. Ask HR or check your plan document before you front-load. Without a true-up, spread the money evenly across every paycheck.
What does contributing really cost after taxes?
Less than the number on your statement. A traditional 401(k) contribution comes out before federal income tax, and in most states before state tax. It does not reduce Social Security or Medicare tax.
- Contribution (10% of pay)
- $8,500
- Taxable income without the 401(k)
- $68,900
- Taxable income with the 401(k)
- $60,400
- Federal income tax without
- $9,870
- Federal income tax with
- $8,000
- Federal tax saved
- $1,870
- Real cost to your take-home pay
- $6,630
That works out to about $255 less per biweekly check for $327 saved. Going from 6% to 7% at this salary trims take-home pay by only about $26 per check. To see your own take-home pay, try our paycheck tax calculator.
Traditional or Roth 401(k)?
Both share the same limit. Traditional cuts your tax now; withdrawals are taxed later as ordinary income (see how 401(k) withdrawals are taxed). Roth gives no break now, but qualified withdrawals are tax-free (IRS Roth FAQs). Roth tends to suit people in the 10% or 12% bracket who expect higher income later. Traditional tends to suit those in the 22% bracket or above. Splitting between them is a fair hedge if you are unsure.
How do you raise your contribution without feeling it?
- Turn on auto-escalation. Many plans raise your rate by one point each year. In 2025, 71% of Vanguard plans with auto-enrollment did this by default. Vanguard suggests a cap at 15% or more, including the employer's share.
- Check your default rate. If you were auto-enrolled, you may be stuck at 3% or 4%. Among auto-enrollment plans, 32% default to 3%, which is below the full match in many plans.
- Save half of every raise. A 4% raise can fund a two-point increase, and your take-home still goes up.
- Leave it alone. Cashing out early costs 10% plus income tax. See the 401(k) early withdrawal penalty before you touch it.
The bottom line
Start with the match, because nothing else in personal finance pays an instant 50% or 100%. Then add a point a year until you and your employer together reach 15%. Max out if you started late or earn more. Check the true-up rule before you front-load, and revisit your rate every January when the limits change.
