🏦 401(k) Retirement Calculator
Your 401(k) is one of the most powerful tools for building long-term wealth. This 401(k) Calculator helps you visualize its potential by projecting how your current balance and future contributions—including the crucial employer match—can grow over time. See a clear picture of your retirement savings journey and understand the impact of your investment choices.
This tool is perfect for anyone with a 401(k) who wants to understand their savings trajectory, from new employees setting up their first contributions to seasoned professionals fine-tuning their retirement strategy.
How to Project Your 401(k) Growth
- Enter Your Current Details: Provide your current age, desired retirement age, current 401(k) balance, and your annual salary.
- Define Your Contributions: Input your monthly contribution amount and details about your employer's match program.
- Set Your Assumptions: Estimate your annual salary increase and the expected annual rate of return on your 401(k) investments.
- Analyze Your Projection: The calculator will instantly show your estimated 401(k) balance at retirement, a breakdown of your contributions versus growth, and a chart visualizing your savings over time.
Your Details & Goals
Contributions & Growth
401(k) Projection Summary
How Your 401(k) Growth is Calculated
This calculator projects your 401(k) balance year by year until you reach your specified retirement age. Here’s the logic:
- Annual Growth: Each year, your existing balance grows based on your assumed annual rate of return.
- Your Contributions: Your total annual contributions are added to the balance.
- Employer Match: The calculator determines the maximum amount your employer will match based on your salary and their matching rules. It then adds this "free money" to your balance.
- Salary Increase: Your salary, and consequently your potential employer match, increases each year based on your assumed salary increase rate.
This cycle repeats for each year, demonstrating the powerful compounding effect of consistent contributions, employer matching, and investment returns.
Use Cases and Examples
Scenario 1: The Power of the Employer Match
Profile: Maria contributes 6% of her $70,000 salary. Her employer matches 50% of her contributions up to 6% of her salary.
Result: Maria contributes $4,200 per year, and her employer adds an extra **$2,100** for free. This significantly accelerates her savings compared to an account with no match.
Scenario 2: Not Capturing the Full Match
Profile: David also has a 50% match up to 6%, but he only contributes 3% of his $70,000 salary.
Result: David contributes $2,100, and his employer matches that with $1,050. By not contributing the full 6%, he is leaving **$1,050** of free money from his employer on the table each year.
Scenario 3: The Risk of Front-Loading Contributions
Profile: Chris, earning $70,000, decides to contribute heavily at the start of the year to max out their 6% contribution early. Their employer matches contributions *per paycheck*.
Result: Chris contributes $4,200 in the first few months. The employer matches this portion, contributing $2,100. However, for the rest of the year, Chris's contribution is $0 per paycheck, so the employer match is also $0. This is a common pitfall; if your company doesn't offer a "true-up" contribution at the end of the year, front-loading can cause you to miss out on the full potential match.
Frequently Asked Questions (FAQs)
What are the 401(k) contribution limits?
The IRS sets annual limits on how much you can contribute to your 401(k). These limits change periodically. For 2024, the limit is $23,000 for employees under 50, and $30,500 for those 50 and over (including catch-up contributions). Note that employer contributions do not count toward this limit.
What's the difference between a Traditional and a Roth 401(k)?
With a **Traditional 401(k)**, your contributions are pre-tax, which lowers your taxable income today. You pay taxes on withdrawals in retirement. With a **Roth 401(k)**, your contributions are after-tax, but your qualified withdrawals in retirement are tax-free.
What should I do if my employer doesn't offer a match?
Even without an employer match, a 401(k) is still a powerful retirement savings tool due to its tax advantages and high contribution limits. You should still aim to contribute as much as you can comfortably afford.