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401(k) Calculator in Virginia

In Virginia, pre-tax 401(k) contributions reduce both federal and state (5.75%) taxable income. Retirement distributions: partial pension exemption. Enter your salary and employer match below. Formula shown, sources cited — no account required.

5.75%
State Income Tax
Partial pension exemption
Retirement Tax Status
$2,763/yr
Match (3% of Median Income)
years
years
$
$
% of salary

2025 IRS max: $23,500/yr ($31,000 if 50+)

%

Historical S&P 500 avg: ~7% real

%

100% = dollar-for-dollar, 50% = 50¢ per $1

% of salary

e.g., 3% means match applies up to 3% of your salary

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How 401(k) Contributions Work in Virginia

A pre-tax 401(k) contribution reduces your adjusted gross income dollar-for-dollar at the federal level. In Virginia, contributions also reduce your Virginia state taxable income at the 5.75% rate. On the state's median household income of $92,090, contributing 6% ( $5,525/year) saves $1,216 in federal tax (22% bracket) plus $318 in state tax — a combined $1,534/year reduction in your tax bill.

The formula for your projected 401(k) balance uses month-by-month compounding:

Monthly interest = Balance × (Annual Return ÷ 12)

New Balance = Balance + Monthly Interest + (Employee + Employer Contribution) ÷ 12

Example for Virginia: Contributing 6% of the $92,090 median income ( $5,525/year) with a typical 100%-match-up-to-3% employer match ($2,763/year) = $8,288/year combined. At a 7% annual return over 30 years, that grows to approximately $842,593 — generating roughly $33,704/year in retirement income under the 4% rule. The employer match alone ($2,763/year at 7% for 30 years) accounts for approximately $3,370,780 of that total.

Virginia Retirement Tax Status: Partial pension exemption

The tax treatment of 401(k) withdrawals at the state level directly affects whether a Traditional or Roth 401(k) is more advantageous for Virginia residents. In Virginia, Traditional 401(k) withdrawals are generally subject to state income tax (Partial pension exemption). The effective advantage of pre-tax contributions depends on whether your state tax rate in retirement will be higher or lower than today. For most Virginia residents, deferring state tax is still beneficial because retirement income is typically lower than peak working income.

2026 IRS 401(k) Contribution Limits

The IRS sets contribution limits uniformly — they are the same in Virginia as in every other state:

  • Under age 50: $23,500/year employee elective deferral
  • Age 50–59 and 64+: $31,000/year (includes $7,500 catch-up)
  • Age 60–63: $34,750/year (SECURE 2.0 higher catch-up of $11,250)
  • Total plan limit (employee + employer): $70,000/year

Questions You Might Ask — 401(k) in Virginia

How does Virginia's income tax affect my 401(k) contributions?+
In Virginia, pre-tax 401(k) contributions reduce both your federal and state taxable income. On a $92,090 median income, contributing 6% ($5,525/year) saves approximately $1,216 in federal taxes (22% bracket) plus $318 in state taxes (5.75% rate) — a combined tax savings of $1,534/year. Every dollar deferred to a pre-tax 401(k) effectively costs only 72 cents out of pocket.
Are 401(k) withdrawals taxed in Virginia?+
Partial pension exemption. Virginia partially exempts or taxes retirement income. Traditional 401(k) withdrawals are generally taxed as ordinary income at the state level (5.75% top rate), though pension and retirement income exclusions may apply. Consult a Virginia tax advisor to determine which exemptions apply to your situation.
What is the 401(k) contribution limit for 2026?+
For 2026, the IRS employee elective deferral limit is $23,500/year. Employees age 50–59 and 64+ can contribute an additional $7,500 catch-up, bringing the total to $31,000. Employees aged 60–63 have a higher catch-up of $11,250 under SECURE 2.0, bringing their total to $34,750. The overall plan limit (employee + employer combined) is $70,000. These limits apply in Virginia exactly as they do nationwide — the IRS sets federal limits that are uniform across all states.
How much should I contribute to my 401(k) in Virginia?+
The first priority in any state is capturing the full employer match — that is an immediate 50%–100% return with zero risk. On Virginia's median household income of $92,090, contributing 3% ($2,763/year) typically captures a 3% employer match of equal value — $2,763/year in free money. Beyond the match, the 15%-of-gross target means contributing about 12% yourself if your employer matches 3%. Contributing 6% ($5,525/year) plus the typical $2,763 employer match = $8,288/year invested, which compounds to approximately $842,593 over 30 years at 7% — generating roughly $33,704/year (4% rule) in retirement income.
Roth 401(k) vs. Traditional 401(k) in Virginia — which is better?+
In Virginia with a 5.75% state income tax, Traditional 401(k) contributions reduce both federal and state taxable income now. The question is whether you expect to be in a higher or lower combined (federal + state) bracket in retirement. If Virginia does not exempt retirement income and you expect similar income in retirement, Roth contributions avoid both federal and state tax on all future growth — potentially a strong advantage for younger workers in lower brackets. A hybrid approach (some Traditional for the immediate deduction, some Roth for future tax-free income) provides flexibility in retirement.

Data Sources & Methodology

IRS contribution limits from IRS.gov (Rev. Proc. 2024-25). State income tax rates from Tax Foundation. Retirement tax status from AARP and state revenue department publications. Median household income from U.S. Census Bureau American Community Survey. Projections use month-by-month compounding at 7% nominal return per year. Last updated 2026.

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