What is the 401k contribution limit in Arizona for 2026?
The IRS employee deferral limit is $24,500 in 2026, plus $8,000 catch-up for those age 50+ ($32,500 total). Arizona follows federal qualified plan limits.
401k Calculator Arizona 2026
Arizona workers can defer up to $24,500 to a 401k in 2026 ($32,500 with the $8,000 catch-up at age 50+). Traditional 401k deferrals typically reduce Arizona taxable income as well as federal, saving at the flat 2.5% state rate on deferred amounts. Typical employer matches run 3–6%. Roth 401k may be offered for after-tax federally tax-free qualified growth.
401(k) and IRA projections update as you type — educational only.
Arizona: traditional deferrals generally reduce AZ taxable income — calculator is federal-focused. Not financial or tax advice.
IRS cap $24,500/yr
Simplified model: 100% match up to this % of salary. Actual employer formulas vary (e.g. 50% up to 6%, tiered match, etc.)
Your contributions grow as your salary grows.
Projected balance
$1,472,304
Your contributions$344,829
Employer match$103,449
Investment growth$999,027
Monthly at retirement (4% rule)$4,908
Years to retirement30
The 4% rule is a general guideline, not a guarantee. This is not financial advice.
Balance breakdown (stacked)
Your contributionsEmployer matchGrowth
401k Contribution Limits 2026
| Type | 2026 Limit | Notes |
|---|---|---|
| Employee contribution | $24,500 | IRS |
| Catch-up (age 50+) | +$8,000 | Total $32,500 |
| Catch-up (age 60–63, if eligible) | +$11,250 | Federal |
| Total with employer match | Up to $72,000 | Combined |
Arizona 401k Tax Treatment — 2.5% Flat, Deferrals Reduce Taxable Income
Traditional elective deferrals usually reduce Arizona taxable wages, saving 2.5% state tax on those dollars plus federal benefit. Qualified plan distribution rules apply at retirement.
401k Savings Growth Example (Arizona)
| Monthly Contribution | Years | 7% Return | Est. Balance |
|---|---|---|---|
| $500 | 20 | 7% | ~$262,000 |
| $1,000 | 20 | 7% | ~$524,000 |
| $2,042 ($24,500/yr) | 20 | 7% | ~$1,071,000 |
| $2,042 ($24,500/yr) | 30 | 7% | ~$2,467,000 |
Arizona Traditional vs Roth 401k 2026
With a low flat state rate, federal bracket planning drives most of the traditional vs Roth decision. Many workers still capture a 3–6% match in traditional dollars before adding Roth elective deferrals.
Frequently Asked Questions
Do Arizona 401k contributions reduce state taxable income?
Yes — Arizona generally conforms so traditional 401k elective deferrals reduce Arizona taxable income, similar to federal. Arizona’s state income tax is a flat 2.5% for many filers under current law.
What is Arizona’s state income tax rate?
Arizona uses a 2.5% flat rate for many taxpayers. Deferring to a traditional 401k lowers the income subject to that rate.
What is a typical employer 401k match in Arizona?
Technology, healthcare, and logistics employers in Arizona often match about 3% to 6% of salary. Combined contributions cap at $72,000 in 2026 before catch-ups.
Traditional or Roth 401k in Arizona?
Traditional deferrals save 2.5% Arizona tax plus federal on deferred wages. Roth 401k trades current federal tax for qualified federally tax-free withdrawals.
Is Roth 401k available in Arizona?
Many Arizona employers offer Roth 401k. Confirm payroll codes and vesting in your SPD.
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Educational estimates only. Not financial or tax advice.