Capture the full match
Check the exact formula and the contribution percentage required. Auto-enrollment may start below the rate needed to receive every available employer dollar.
Test the illustration →
THE WORKPLACE PLAN DECISION MAP
Your 401(k) is not one decision.
It changes jobs as your career changes: capture the employer match while you work, decide what deserves to happen when you leave, and know which rules matter when the money comes out.
The planner's order: get the match, understand the tax choice, protect your rollover options, then decide how the account should serve the next stage of your life.
ONE WORKPLACE ACCOUNT · THREE JOBS
Keep the decision connected.
01BuildMatch · tax choice
02DecideStay · move · roll
03UseAccess · taxes · RMDs
THE ACCOUNTKeep options open
The “best” move depends on the job your money needs to do next.
START WITH THE DECISION IN FRONT OF YOU
Where are you with the plan?
Most 401(k) mistakes are not caused by one bad investment. They happen when a contribution, job change or withdrawal decision is made without seeing the next decision attached to it.
01 · WHILE WORKING
Am I getting the full match?
Set the contribution floor, choose Roth or traditional, and check the rules in your actual plan.
Build the account →
02 · LEAVING A JOB
What should happen to the old 401(k)?
Compare leaving it, moving it, rolling it to an IRA, or taking the money out.
Compare the four choices →
03 · TAKING MONEY OUT
When can I use the money?
Follow the age line from early access to the Rule of 55, 59½ and required withdrawals.
Find the age window →
THE FIRST MONEY DECISION
The match is the floor. Your plan is the bigger question.
First contribute enough to capture the full employer match. Then decide how much more fits your cash flow, tax strategy and retirement target. Move the slider to see the tradeoff.
Illustration: $60,000 salary, 50% employer match up to 6% of pay. Your plan's formula may be different.
Total going into the plan$5,400
Illustrative employer match$1,800
Employee limit still available$20,900
At 6% of pay, this illustration captures the full employer match.
What changes when you move the slider? The match stops growing after the illustrative 6% of pay, but your employee contribution room continues toward the 2026 limit.
2026 REFERENCE POINTS
The limits are useful. The plan document is still the authority.
These are the federal reference points for 2026. Your employer's plan can impose its own match formula, vesting schedule, investment menu and distribution rules.
Employee deferral$24,500401(k), 403(b), most 457(b) plans and TSP.
Age 50+ catch-up$32,500$24,500 plus the $8,000 catch-up.
Age 60–63 catch-up$35,750$24,500 plus the higher $11,250 catch-up.
Total annual additions$72,000Employee and employer contributions; catch-ups can be on top.
New for 2026: if your 2025 wages from the plan sponsor exceeded $150,000, catch-up contributions in an applicable employer plan generally must be Roth when the plan offers a Roth feature. This test uses plan-sponsor wages, generally W-2 Box 3 wages, not Box 1 taxable wages.
Other 2026 plan limits
| Limit | 2026 | What it covers |
|---|---|---|
| SIMPLE employee limit | $17,000 | Small-employer plans. Catch-up: $4,000 at 50+; $5,250 at ages 60–63. |
| Compensation counted | $360,000 | The compensation limit generally used for plan-limit purposes. |
| Highly compensated employee | $160,000 | The 2026 compensation threshold used for HCE status under applicable rules. |
| IRA limit for comparison | $7,500 | Separate from your workplace-plan deferral limit. |
Source: IRS 2026 retirement-plan limits and IRS catch-up guidance. Checked October 1, 2026.
WHILE YOU ARE WORKING
Three checks before you change the contribution.
A 401(k) is more than a savings bucket. The match, tax treatment and plan type determine what the next dollar is trying to do.
Choose the tax timing
Traditional contributions generally reduce taxable income now and are taxable later. Roth contributions are taxed now and can provide qualified tax-free withdrawals later.
Compare Roth and traditional →Read the fine print
Confirm vesting, fees, investment choices, loans, withdrawal rules and whether the plan offers the Roth feature you think it does.
Compare plan types →PLAN TYPE MATTERS401(k), 403(b), 457(b) and TSP share a savings job, but not every rule.
- 401(k)
- Common with private-sector employers.
- 403(b)
- Schools, nonprofits, churches and hospitals.
- 457(b)
- Government and some tax-exempt employers.
- TSP
- Federal employees and uniformed services.
USERetirement Savings CalculatorCheck whether your savings and contribution path point toward the income you want.Check my savings path →
READCan you have a Roth IRA and a 401(k)?See how workplace and individual accounts can work together.Read the guide →
READRoth IRA vs. 401(k): which first?Compare access, tax treatment, investment choice and contribution rules.Compare them →
WHEN YOU LEAVE A JOB
An old 401(k) gives you four choices. Only one is irreversible.
Leave it, move it to the new plan, roll it to an IRA, or cash it out. Three choices generally preserve tax deferral. Cashing out turns a retirement account into a tax event.
| Choice | Taxed now? | Keeps tax deferral? | Rule of 55? | The catch |
|---|---|---|---|---|
| Leave it in the old planDo nothing | No | Yes | Potentially If you separated from that employer in or after the qualifying year. | Easy to lose track of. Plan rules can also move small balances automatically after required notices. |
| Move it to the new job's planDirect rollover | No For an eligible direct rollover. | Yes | Later Based on separation from the new employer. | The new plan must accept rollovers, and you inherit its investment menu and rules. |
| Roll it to an IRADirect rollover | No If eligible pre-tax money moves directly to a traditional IRA. | Yes | No The separation-from-service exception does not apply to IRA withdrawals. | Broader investment choice may come with a tradeoff: you may give up an employer-plan early-access option. |
| Cash it outTake the money | Usually Taxable pre-tax money is income, and a 10% additional tax may apply before 59½ unless an exception applies. | No | Not relevant | An eligible rollover distribution paid to you generally has 20% federal withholding up front. That is a prepayment, not the final tax bill. |
If you move it, ask for a direct rollover.
With a direct rollover, eligible money moves directly to the receiving plan or IRA and mandatory 20% withholding generally does not apply. If the money is paid to you, you generally must replace the withheld amount to roll over the full taxable distribution within 60 days.
Lost track of an old plan?
Start with old statements, the employer's HR or benefits office and the free Department of Labor Retirement Savings Lost and Found.
Review the old-401(k) finder guide →
TAKING MONEY OUT
The age you leave work can change the access rule.
Workplace plans have one age-based advantage IRAs do not: the separation-from-service exception often called the Rule of 55. Find your situation on the line, then read the plan rules before acting.
Early access is limited
Taxable withdrawals before 59½ can face ordinary income tax plus a 10% additional tax unless an exception applies.
Explore early access →The Rule of 55
Separate from service during or after the calendar year you turn 55, and qualifying distributions from that employer plan can avoid the 10% additional tax. Income tax can still apply.
See the eligibility traps →The usual hurdle changes
The 10% additional tax generally no longer applies just because of age. Pre-tax withdrawals are generally taxable income.
Compare Rule of 55 and 72(t) →Required withdrawals
RMDs generally begin at 73. Current-employer plans may allow a delay until retirement unless you are a 5% owner, but the plan can require distributions sooner.
Open the RMD calculator →Roth note: designated Roth accounts in 401(k) and 403(b) plans generally do not require lifetime RMDs for the original account owner.
A USEFUL NEXT STEP
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NEW & WORTH KNOWING
The workplace-plan questions people are asking now.
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