What is the RaiseRight 401(k) strategy?

The RaiseRight strategy means redirecting a portion of your salary raise directly into your 401(k) before you adjust your lifestyle to the higher income. Since you never 'see' the money in your paycheck, you avoid lifestyle inflation and build wealth automatically. Over a 30-year career with regular raises, this single habit can add hundreds of thousands of dollars to your retirement account.

How much of my raise should I redirect to my 401(k)?

A common starting point is 50% of your raise -- enough to meaningfully boost retirement savings while still enjoying some of the pay increase. If you're behind on retirement savings, redirecting 75-100% of raises is a powerful catch-up strategy. Even redirecting just 25% of each raise compounds dramatically over time because the base keeps growing with every future raise.

Does redirecting my raise to a 401(k) reduce my taxes?

Yes. Traditional 401(k) contributions are pre-tax, so every dollar you redirect reduces your taxable income. At a 22% marginal rate, redirecting $2,000 of your raise to a 401(k) only costs you $1,560 in actual take-home pay -- the IRS effectively subsidizes $440 of your contribution. At a 24% rate, the subsidy is even larger.

What are the 2025 401(k) contribution limits?

For 2025: under age 50 -- $23,500; age 50-59 and 64+ -- $31,000 (standard catch-up); ages 60-63 -- $34,750 (SECURE 2.0 super catch-up). This calculator automatically applies the correct limit based on your age and alerts you if your planned contribution would exceed the IRS limit.

How does employer matching factor in?

Employer matching is essentially free money. If your employer matches 50% of contributions up to 6% of your salary, redirecting your raise to hit or exceed that 6% threshold maximizes the free match. This calculator includes employer match in the retirement projection. Failing to capture the full match is one of the most common and costly retirement mistakes.

Why does the calculator show a 'net cost' of the redirect?

Because pre-tax 401(k) contributions reduce your taxable income, the actual take-home cost of redirecting your raise is less than the dollar amount redirected. For example, redirecting $3,000 at a 24% marginal rate only costs $2,280 in take-home pay -- a $720 tax subsidy from the IRS. The higher your marginal tax rate, the cheaper each dollar of 401(k) contribution becomes.

Should I increase my 401(k) contribution every time I get a raise?

Yes -- this is one of the highest-impact financial habits you can build. Each raise is an opportunity to increase your contribution rate before your spending adjusts upward. Even a 1-2% contribution increase after each raise keeps your lifestyle stable while dramatically accelerating your retirement savings. Most 401(k) plans let you update your contribution percentage online in minutes.

What is lifestyle inflation and how does the RaiseRight strategy prevent it?

Lifestyle inflation (also called lifestyle creep) is the tendency to increase spending as income rises -- new car, bigger apartment, more dining out -- until the raise disappears into higher monthly expenses. The RaiseRight strategy prevents this by increasing your 401(k) contribution immediately after a raise, before new spending patterns form. Because the money never appears in your take-home pay, you don't miss it.

What is the SECURE 2.0 super catch-up contribution for ages 60-63?

The SECURE 2.0 Act of 2022 created a special 'super catch-up' provision for workers aged 60-63. In 2025, these workers can contribute up to $34,750 to their 401(k) -- $11,250 more than the standard limit of $23,500. This is significantly higher than the standard catch-up limit of $31,000 for workers aged 50-59 and 64+. The RaiseRight calculator automatically applies the correct limit for your age.

How does this calculator compare to a standard 401(k) contribution calculator?

A standard 401(k) calculator shows how a fixed contribution grows over time. The RaiseRight calculator is specifically designed for the moment after a raise -- it takes your current salary, your raise amount, and the percentage of the raise you want to redirect, then shows the exact new contribution amount, the tax savings from the redirect, the employer match impact, and the long-term retirement wealth difference between redirecting vs. spending the raise.

Can I use this calculator for a Roth 401(k) instead of a traditional 401(k)?

The tax savings calculation applies specifically to traditional (pre-tax) 401(k) contributions. Roth 401(k) contributions are made with after-tax dollars, so they don't reduce your current taxable income. However, the retirement wealth projection and employer match calculations still apply to Roth 401(k) contributions. If you use a Roth 401(k), the 'net cost' shown in the calculator represents your actual out-of-pocket cost with no tax reduction.

What happens if I'm already at the 401(k) contribution limit?

If you're already contributing the maximum ($23,500 in 2025, or $31,000-$34,750 with catch-up), you can't put more into your 401(k). In that case, consider directing your raise to a Roth IRA (up to $7,000/year in 2025, or $8,000 if 50+), a Health Savings Account (HSA) if you have a high-deductible health plan, or a taxable brokerage account. The calculator will alert you if your planned contribution would exceed the IRS limit.

Financial

RaiseRight 401(k) Calculator

Should I put my raise in my 401(k)? The RaiseRight calculator shows exactly how much to contribute after a raise, your tax savings, employer match boost, and how much more you will have at retirement. Free, instant, no sign-up.

Current Annual Salary (USD)

Raise Percentage (%)

Current 401(k) Contribution (% of salary)

% of Raise to Redirect to 401(k)

Redirect before you adjust to the new lifestyle.

Filing Status

Your Age (for IRS limits)

Under 50: $23,500 standard limit

State (for state income tax)

Employer Match (% of your contribution)

e.g., 50 = employer matches 50¢ per dollar

Match Up To (% of salary)

e.g., 6 = employer matches up to 6% of salary

Expected Annual Return

Years to Retirement

Your Raise

Raise Amount

$3,750

5% of $75,000

New Salary

$78,750

After raise

Take-Home Increase

$1,875

$1,875 redirected to 401(k)

401(k) Contribution Impact

Raise Redirected

$1,875

50% of $3,750 raise

New Annual Contribution

$6,375

8.1% of new salary

Employer Match Added

$2,363

Free money from employer

Tax Savings from Redirect2025 rates · Texas

Federal Rate

22.0%

Saves $413

State Rate

0.0%

No state income tax

Net Cost of Redirect

$1,462.50

After all tax savings

No state income tax on wages

Retirement Projection (30 years at 7%)

Without Raise Redirect

$682,243

Keeping current contribution

With Raise Redirect

$883,126

Including employer match

Additional Retirement Wealth

+$200,883

By redirecting your raise

The RaiseRight 401(k) Strategy

By redirecting $1,875 (50% of your $3,750 raise) to your 401(k), you invest before you adjust to a new lifestyle. After federal tax savings, this redirect only costs you $1,462.50 in actual take-home pay. Combined with your employer's $2,363 match, you're adding $8,738 per year — potentially building $200,883 more by retirement.

Note: Tax rates reflect 2025 IRS brackets and Tax Foundation state data. State rates shown are top marginal rates; your effective rate may be lower. Washington state's 7% applies to capital gains only — wages are not taxed. Projections assume constant annual contributions, a fixed rate of return, and no withdrawals. Actual returns will vary. Consult a financial advisor for personalized retirement planning.

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How to Use the RaiseRight 401(k) Calculator

Follow these steps to calculate your RaiseRight 401(k) strategy.

1
Step 1
Enter your current annual salary and the percentage raise you received or expect to receive.
2
Step 2
Set your current 401(k) contribution percentage and choose how much of the raise to redirect (25%, 50%, 75%, or 100%).
3
Step 3
Enter your age, filing status, and employer match details. Your age determines which 2025 IRS contribution limit applies.
4
Step 4
Review the results: your raise breakdown, new 401(k) contribution, tax savings, employer match, and projected retirement wealth gain.

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