Colorado workers can defer up to $24,500 to a 401k in 2026, plus an $8,000 catch-up for those age 50 and over, with combined employee and employer contributions capped at $72,000. Colorado's flat state income tax is 4.4%; traditional 401k deferrals typically reduce Colorado taxable income as well as federal. Typical employer matches are often 3–6% of pay. This page is educational only.
401(k) and IRA projections update as you type — educational only.
Colorado: flat 4.4% state income tax — traditional 401(k) deferrals usually reduce CO taxable income; model 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
The 4% rule is a general guideline, not a guarantee. This is not financial advice.
Balance breakdown (stacked)
| 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 | Enhanced catch-up (federal) |
| Total with employer match | Up to $72,000 | Combined limit |
Colorado uses a flat 4.4% state income tax. For most workers, pre-tax traditional 401k deferrals reduce federal adjusted gross income and generally reduce Colorado taxable income, lowering current state tax. Distributions from traditional 401k accounts are generally taxable in Colorado in retirement. Roth 401k contributions are after-tax for federal purposes; qualified withdrawals may be treated favorably — confirm current Colorado rules with a tax professional.
| 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 |
With a flat 4.4% Colorado rate, traditional 401k deferrals save a predictable amount of state tax now. Roth 401k trades an upfront tax cost for potential federally tax-free qualified withdrawals. A typical 3–6% employer match is often traditional dollars even if you elect Roth deferrals — check your plan document. Many workers capture the full match first, then split additional savings based on federal and state brackets.
The IRS sets the same limits nationwide: $24,500 in employee deferrals for 2026. Workers aged 50 and older can add an $8,000 catch-up for $32,500 total. Optional higher catch-ups may apply at ages 60–63 under federal rules. Combined employee and employer contributions can reach up to $72,000 in 2026 (plus catch-ups where allowed).
Colorado has a flat state income tax of 4.4%. Traditional 401k salary deferrals generally reduce both federal and Colorado taxable income in the same way as most conforming states, so you typically save Colorado tax on amounts deferred now and pay Colorado tax on traditional 401k withdrawals in retirement.
Many Colorado employers match about 3% to 6% of salary when you defer enough to earn the full match. Always contribute enough to capture the full match. The combined employee plus employer limit is $72,000 in 2026 before age-based catch-ups.
Traditional 401k lowers federal and generally Colorado taxable income now at a flat 4.4% state rate. Roth 401k uses after-tax dollars but can provide federally tax-free qualified withdrawals; Colorado may tax Roth contributions going in but qualified Roth withdrawals are often favorable — confirm with a tax advisor.
Total contributions from you and your employer generally cannot exceed $72,000 in 2026 (plus allowed catch-ups). Employer matching dollars count toward that cap.
Many employers offer Roth 401k alongside traditional. After-tax contributions grow federally tax-free if qualified; weigh current Colorado tax on Roth deferrals against your expected retirement tax picture.
Educational estimates only. Not financial or tax advice.