Question 1

What is the 401k contribution limit for 2026?

Accepted Answer

The IRS 401k contribution limit for 2026 is $23,500 for employees under age 50. Workers aged 50 and older can contribute an additional $7,500 catch-up contribution, for a total of $31,000.

Question 2

How does employer 401k matching work?

Accepted Answer

A common employer match is 50%–100% of your contributions up to 3%–6% of your salary. For example, a "100% match up to 3%" means if you earn $75,000 and contribute 3% ($2,250), your employer adds another $2,250 — a 100% instant return on that money.

Question 3

Should I contribute to a traditional 401k or Roth 401k?

Accepted Answer

A traditional 401k reduces your taxes now (pre-tax contributions) but you pay taxes in retirement. A Roth 401k uses after-tax money but grows and withdraws tax-free. Generally, choose Roth if you expect to be in a higher tax bracket in retirement, traditional if you expect a lower bracket.

Question 4

What is the 4% rule?

Accepted Answer

The 4% rule is a retirement withdrawal guideline suggesting you can withdraw 4% of your portfolio in year one, then adjust for inflation each year, with a high probability of your money lasting 30 years. On a $1 million portfolio, that is $40,000/year or $3,333/month.

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