Understanding 401(k) Save the Max
Real-world scenario: Salary $90,000; limit $24,500; catch-up $7,500; age 52; currently deferring 8%.
What is 401(k) Save the Max?
A limit-capture planner for employee elective deferrals. Employer match, after-tax, and mega backdoor rules are outside this tool—update the limit fields for the plan year you care about.
- Editable IRS limits — paste the current-year figures
- Catch-up applies when age ≥ 50
- Does not enforce compensation percentage plan caps
The Formula
Max Employee Deferral
Max $ = Elective limit + (age ≥ 50 ? Catch-up : 0)
Worked Example
Scenario: Salary $90,000; limit $24,500; catch-up $7,500; age 52; currently deferring 8%.
Step 1: Max $ = 24,500 + 7,500 = 32,000
Step 2: Max % = 32,000 ÷ 90,000 ≈ 35.56%
Step 3: Current $ = 7,200; gap = 24,800
Answer: Max deferral is $32,000 (~35.56% of salary); gap to max ≈ $24,800.
Common Use Cases
- Open enrollment: set deferral % to hit the cap
- Raise planning: keep maxing after a raise
- Catch-up years: age 50+ boost
Pro Tips
- Verify the year’s IRS limits before filing
- Match still matters—don’t skip free match
- High earners may hit $ sooner in the year
Limitations: 401(k) Save the Max results are educational retirement planning aids—not tax, Social Security, investment, or legal advice. Confirm figures with the IRS, SSA, plan administrators, and a qualified professional.
FAQ
Does this include employer match?
No. It only sizes the employee elective deferral toward the IRS limit you enter. Match is additional.
What if max % exceeds what payroll allows?
Some plans cap deferral %. Use the lower of plan cap and IRS max. This tool shows the IRS-side ceiling.
Authoritative References
For retirement education, consult:
- IRS retirement plans — contribution limits and RMDs
- Social Security Administration — benefit estimates
- Investor.gov — investor education