🏢 401(k) Calculator
Calculate your 401(k) growth with employer matching. See how much you'll have at retirement and maximize your free money!
Why Use This Calculator?
Maximize Free Money from Employer Match
Never leave employer match on table - it's instant 50-100% return. If employer matches 50% up to 6% salary, contributing 6% on $70,000 = $4,200 you contribute + $2,100 employer = $6,300 total. Missing match costs $2,100/year ($84,000 over 40 years at 7%).
Project Retirement Balance with Accuracy
See exact 401k value at retirement based on current savings, contributions, match, and growth rate. Starting at 25 with $0, contributing $500/month + $250 match at 8% = $1,863,000 at 65. Starting at 35 same rate = $745,000. Decade delay costs $1.1M.
Optimize Contribution Percentage
Calculate ideal contribution to maximize match without over-contributing to wrong account type. If match caps at 5% salary, contributing 15% means 10% could go to Roth IRA instead (often better for young workers). Strategic allocation maximizes tax benefits.
Compare Traditional vs. Roth 401k Tax Impact
Traditional 401k: pre-tax contributions (save 22-24% taxes now), taxed in retirement. Roth 401k: after-tax contributions, tax-free withdrawals. In 22% bracket contributing $10,000 traditional costs $7,800 take-home, Roth costs full $10,000.
Calculate Impact of Contribution Increases
See how 1% annual contribution increases accelerate savings. Starting 6%, increasing 1% yearly to 15% on $65,000 salary over 30 years at 7% = $1,243,000. Staying at 6% = $664,000. Small increases = $579,000 more retirement wealth.
Understand Compound Growth on Matched Funds
Employer match gets same compound growth as your contributions. $3,000 annual match for 30 years at 8% = $367,000 from employer money alone. This 'free' money compounds into substantial portion of final balance - maximize it early.
Step-by-Step Guide
Enter Current Age and Retirement Age
Input your current age and target retirement age (typically 65-67 for full Social Security). Time horizon is crucial - more years = exponentially more compound growth. Even 5-year difference changes final balance by 40-60%.
Example:
Example: Age 30, retire 65 = 35 years compound growth. Age 40, retire 67 = 27 years. That 8-year difference cuts potential final balance nearly in half
Input Current 401k Balance
Enter existing 401k balance if you have one. This principal will compound alongside new contributions. Even modest existing balance grows substantially - $25,000 current balance becomes $269,000 in 30 years at 8% with zero additional contributions.
Example:
Example: $0 if just starting, $15,000 from previous employer, $85,000 if been saving 10 years. Check latest statement for exact amount
Enter Your Annual Gross Salary
Input current annual salary before taxes. This determines contribution amounts and match calculations. Use base salary - don't include bonuses unless contributing % of bonuses too (check plan rules).
Example:
Example: $65,000 base salary, $82,000 with regular bonus, $48,000 for part-time employee. Use W-2 Box 1 amount from last year as reference
Set Your Contribution Percentage
Enter % of salary you contribute. 2024 max: $23,000 ($30,500 if 50+). Minimum should be enough for full employer match. Financial experts recommend 10-15% total (your % + employer %). Start higher if behind on savings.
Example:
Example: 6% to get full match, 10% if no debt, 15% if behind on retirement savings. On $70,000: 6% = $4,200/year, 15% = $10,500/year
Enter Employer Match Formula
Check your plan documents for match formula. Common: '50% match up to 6% of salary' or '100% match up to 3% + 50% on next 2%'. Enter both match percentage and salary cap. Missing this means leaving thousands unclaimed annually.
Example:
Example: Employer matches 50% up to 6% salary. You contribute 6% of $60,000 ($3,600), get $1,800 match. Contributing only 4% = only $1,200 match, lose $600 free money
Use Realistic Return Rate (6-8%)
Stocks historically return 10% but 401k contains bonds/stable funds reducing average. Use 6-7% conservative, 8% moderate, 9% aggressive. Don't use 12%+ - leads to disappointment. Better to exceed conservative projection than fall short of optimistic.
Example:
Example: Conservative portfolio (60% stocks/40% bonds): 6-6.5%. Moderate (80/20): 7-7.5%. Aggressive (100% stocks): 8-9%. Adjust for your actual allocation
Factor in Annual Raises (2-4%)
Most people receive 2-4% annual raises. Contributing same % of higher salary automatically increases contribution amount over time. This significantly boosts final balance vs. flat dollar contributions.
Example:
Example: Starting salary $50,000, 6% contribution = $3,000/year. With 3% annual raises: Year 10 salary $65,000, contribution $3,900. Compounds to much more than static $3,000
Calculate Tax Savings from Contributions
Traditional 401k contributions reduce taxable income. In 22% federal + 5% state + 7.65% FICA (if under $168k) = 34.65% saved. $10,000 contribution costs only $6,535 in take-home. Understand true cost vs. benefit trade-off.
Example:
Example: Contributing $12,000 in 24% bracket saves $2,880 federal + $918 FICA + state = $4,000+ total tax savings. Real cost only $8,000 from paycheck
Review Projected Balance at Retirement
See estimated 401k value at retirement age. This is pre-tax amount. In retirement, assuming 4% safe withdrawal rate, balance ÷ 25 = safe annual income. $1,000,000 = $40,000/year inflation-adjusted income for 30+ years.
Example:
Example: Projected $850,000 at 65 = ~$34,000/year safe withdrawal. Combined with Social Security $25,000 = $59,000 retirement income vs. $45,000 if only Social Security
Calculate Total Employer Contribution Value
See how much employer adds over career. This is pure profit on top of your savings. A $2,500 annual match for 35 years at 7% = $368,000 from employer. Never miss match - leaving $2,500/year = losing $368,000 retirement wealth.
Example:
Example: Employer contributes $3,000/year × 30 years at 8% growth = $367,000 of retirement balance comes from employer match alone. That's free money compounded
Expert Tips & Strategies
Always Contribute Enough to Get Full Match
Employer match is guaranteed 50-100% immediate return - no investment beats that. If match requires 6% contribution, prioritize that over paying extra on low-interest debt, building emergency fund beyond 3 months, or other savings. It's free money that compounds for decades.
Increase Contributions 1% After Every Raise
Got 3% raise? Increase 401k by 1%, live on extra 2%. You won't miss the 1% since you never had it, but it dramatically boosts retirement savings. Going from 6% to 15% over 9 years of raises adds $200,000-400,000 to retirement balance.
Start Saving in Your 20s - Time is Everything
Investing $300/month from 25-35 (10 years, $36,000 total) then stopping = $466,000 at 65 (8% return). Starting at 35 and investing until 65 (30 years, $108,000 total) = $440,000. Starting early beats contributing more later. Don't delay.
Consider Roth 401k if Young or Low Income
Under 30 or in 12% bracket? Roth 401k might be better - pay low taxes now, $0 taxes in retirement. Traditional better in 24%+ bracket (save high taxes now, pay lower taxes retired). Many people should do 50/50 split for tax diversification.
Rebalance Annually to Maintain Target Allocation
If stocks surge, you might be 90% stocks vs. target 80%. Rebalance back to target by moving gains to bonds/stable funds. This automatically sells high, buys low, and controls risk. Rebalancing once yearly maintains proper risk level throughout career.
Increase Stock Allocation When Young, Decrease When Older
Rule of thumb: 110 - your age = % in stocks. At 30: 80% stocks/20% bonds. At 50: 60/40. At 65: 45/55. This balances growth when young with protection near retirement. Adjust based on risk tolerance, but don't be too conservative too early.
Never Borrow or Cash Out 401k Early
401k loan seems harmless but you lose compound growth on borrowed amount plus pay with after-tax dollars. Cashing out before 59½ = 10% penalty + income tax (30-40% total). $20,000 withdrawal costs $6,000-8,000 AND loses $130,000 future growth over 30 years.
Rollover Old 401k to IRA or New Employer
Don't leave 401k with old employer - you lose track, forget about it, or it charges high fees. Roll to new employer's plan or to IRA (more investment options, lower fees). Rollover is tax-free if done correctly (direct trustee-to-trustee).
Common Mistakes to Avoid
Not Contributing Enough to Get Full Match
Contributing 3% when match caps at 6% means leaving 3% salary on table. On $65,000, that's $1,950/year in free money lost.
✓ Better approach: Over 30 years at 8%, you missed $238,000 in retirement savings. Always contribute at minimum enough for full match.
Waiting Until Later Career to Start Saving
Delaying from 25 to 35 to start 401k costs you 50-60% of potential retirement wealth due to lost compound years. $300/month starting at 25 = $1,118,000 at 65. Starting at 35 = $440,000.
✓ Better approach: That decade costs $678,000. Start immediately, even small amounts.
Being Too Conservative in Investment Allocation
Holding 50% bonds at age 30 limits growth. At 6% (conservative) vs. 8% (moderate stocks), $500/month over 35 years = $664,000 vs.
✓ Better approach: $1,087,000 - you lost $423,000 by being too conservative. Young people can afford stock volatility for higher returns.
Stopping Contributions During Market Drops
Markets down 20%? Perfect time to buy more shares cheap with your regular contributions.
✓ Better approach: Stopping means missing the recovery gains. Continue contributions (or increase) during downturns - you're buying shares on sale that will recover.
Taking 401k Loan for Non-Emergencies
Borrowing $15,000 for vacation/car/wedding seems harmless but that $15,000 would grow to $121,000 over 30 years at 8%. Plus you pay loan with after-tax dollars.
✓ Better approach: Only borrow from 401k for true emergencies with no alternatives.
Cashing Out 401k When Changing Jobs
Cashing $30,000 401k at job change costs $9,000 penalties/taxes (30%) plus you lose $244,000 that money would grow to by retirement.
✓ Better approach: Always rollover to new employer or IRA - never cash out unless absolutely destitute.
Not Increasing Contributions With Income Growth
Staying at 6% contribution as salary grows from $50,000 to $90,000 means missed opportunities. Should increase to 10-15% as income rises.
✓ Better approach: Static % is okay, but increasing % with raises accelerates retirement savings dramatically without lifestyle impact.
Learn More
Complete Budgeting Guide
Master the 50/30/20 rule and other proven budgeting strategies to manage your money effectively.
📊Financial Planning Basics
Learn the fundamentals of financial planning, from emergency funds to retirement savings.
⭐Credit Score Improvement Guide
Boost your credit score to qualify for better rates and terms on all financial products.
Related Calculators
Frequently Asked Questions
How much should I contribute to my 401(k)?
At minimum, contribute enough to get the full employer match (free money!). Ideally, aim for 15-20% of your gross income. For 2024, the IRS limit is $23,000 ($30,500 if 50+). Start with the match, then increase 1% per year until you hit 15-20%.
What is employer matching?
Employer match is when your company contributes to your 401(k) based on your contributions. Common example: 50% match up to 6% of salary. If you earn $100k and contribute 6% ($6,000), your employer adds $3,000 (50% of $6,000) - that's a guaranteed 50% return!
Should I do Traditional or Roth 401(k)?
Traditional 401(k): Pre-tax contributions (lower taxes now), taxed on withdrawal. Best if you expect lower tax bracket in retirement. Roth 401(k): After-tax contributions (no tax break now), tax-free withdrawals. Best if young or expect higher tax bracket later. Many choose both.
What is a good 401(k) return rate?
Historical S&P 500 average is 10% annually (7% after inflation). Conservative estimate: 6-7% for diversified portfolio. Your actual return depends on asset allocation, fees, and market conditions. Target date funds automatically adjust allocation as you age.
Can I withdraw from my 401(k) early?
Before age 59½: 10% penalty + income tax (ouch!). Exceptions: hardship withdrawals, Rule of 55, disability, SEPP. Better option: 401(k) loan (borrow from yourself, pay back with interest). Never withdraw early unless absolute emergency - you lose years of compound growth.
Financial Disclaimer
This calculator is provided for educational and informational purposes only. The results are estimates based on the information you provide and should not be considered as financial, legal, or tax advice.
Actual results may vary based on your specific circumstances, market conditions, and other factors. Always consult with qualified financial, legal, and tax professionals before making any financial decisions.
We make no guarantees about the accuracy, completeness, or reliability of the calculations. Use this tool at your own risk.