401k Calculator
Our 401(k) calculator helps you estimate your retirement savings based on your contributions, employer match, investment returns, and vesting schedule. It shows year-by-year projections, includes catch-up contributions after age 50, and lets you compare different scenarios to help maximize your 401(k) balance.
What is a 401(k) Retirement Plan?
A 401(k) is a tax-advantaged retirement savings plan from your employer. It lets you save for retirement through automatic payroll deductions. Named after Section 401(k) of the tax code. It's been the main retirement tool for 60+ million Americans since 1978.
You contribute pre-tax dollars, which lowers your taxable income today. Your money grows tax-deferred until retirement. You pay taxes when you withdraw. Many employers match your contributions (typically 50% up to 6% of salary). That's free money you shouldn't leave on the table.
2026 Contribution Limits
| Age Group | Contribution Limit | Catch-Up Amount | Total Possible |
|---|---|---|---|
| Under 50 | $23,500 | $0 | $23,500 |
| Age 50-59 | $23,500 | $7,500 | $31,000 |
| Age 60-63 | $23,500 | $11,250 | $34,750 |
Why Your 401(k) Matters
Tax Advantages
Contributing $10,000 at a 22% tax bracket saves $2,200 in taxes immediately. Your money grows tax-free until retirement when you're likely in a lower bracket.
Employer Match
A 50% match on 6% of a $75,000 salary adds $2,250 free money annually. Over 30 years at 7% growth, that's $237,000 you didn't contribute.
Real example: A 30-year-old earning $75,000 contributes 10% ($7,500/year). Add a 3% employer match, 3% annual raises, and 7% returns. They'll have $1.8 million at age 65. Without the 401(k)'s tax perks and employer match, you'd need to save $12,000/year in a taxable account for the same result.
How to Use the 401(k) Calculator
Step-by-step guide to maximize your retirement projections
The 401(k) Calculator provides instant retirement projections based on your contributions, employer match, investment returns, and time horizon. Here's how to get accurate results:
Enter Your Personal Information
Input your current age (when you'll start/continue contributing) and retirement age (typically 65-67). The calculator uses this to determine your investment timeline and catch-up contribution eligibility.
Enter your current annual salary before taxes and your existing 401(k) balance if you have one. Don't include bonuses or income from other sources unless they're included in your 401(k) calculations.
Configure Contribution Settings
Set your contribution percentage (how much of your salary you save). Most financial advisors recommend 10-15% minimum. If your employer matches 50% up to 6%, contribute at least 6% to capture all free money.
Check your pay stub or HR portal for exact employer match details. Common formats: "50% match up to 6%" or "100% match on first 3%, then 50% on next 2%."
Set Investment Assumptions
Expected return: Use 6-8% for conservative estimates (bonds + stocks), 7-9% for moderate (mostly stocks), or 5-6% for very conservative (near retirement). Historical S&P 500 average is 10% but use 7% to account for fees and volatility.
Annual salary increase: 2-3% is realistic for inflation-adjusted raises. Use 3-5% if you expect promotions or career growth.
Review Advanced Options
Vesting schedule: Immediate vesting means you own all employer contributions instantly. Graded or cliff vesting means you need to stay employed for years to own employer match. Check your plan documents.
Traditional vs. Roth: Traditional reduces taxes now but you'll pay later. Roth means no tax break today but tax-free withdrawals in retirement. Use traditional if you're in a high tax bracket now.
Common Mistakes to Avoid
- ×Contributing less than the match limit (you're giving up free money)
- ×Ignoring catch-up contributions after age 50 ($7,500/year extra)
- ×Forgetting to enroll when starting a new job (many plans aren't automatic)
- ×Cashing out when changing jobs instead of rolling over (taxes + 10% penalty)
- ×Taking loans from your 401(k) (stunts growth and risky if you leave employer)
Understanding the 401(k) Growth Formula
The math behind compounding retirement savings
Your 401(k) grows through three components: your contributions, employer matching, and investment returns compounded over time. The formula accounts for annual salary increases and different contribution limits as you age.
Annual Balance = Starting Balance × (1 + r) + Contributions + Employer Match
Variables:
- r = Annual investment return (decimal)
- C = Your annual contribution (% of salary)
- M = Employer match (% of salary up to limit)
- S = Annual salary (increases yearly)
- n = Number of years until retirement
- V = Vesting percentage (0-100%)
The magic happens through compound growth: each year's balance earns returns, then next year those returns also earn returns. Over decades, most of your final balance comes from investment growth, not contributions.
Example 1: Starting from Zero
Scenario: You're 25 years old, earning $50,000/year, and start contributing 10% ($5,000/year). Your employer matches 50% up to 6% of salary ($1,500/year). You expect 7% annual returns and 3% salary increases.
Year 1 Calculation:
Your contribution: $50,000 × 10% = $5,000
Employer match: $50,000 × 6% × 50% = $1,500
Total contributions: $6,500
Year-end growth: $6,500 × 7% × 0.5 = $227 (mid-year contribution)
Year 1 Balance: $6,727
Year 5 Calculation:
Salary (3% annual raises): $56,312
Your contribution: $5,631
Employer match: $1,689
Starting balance from Year 4: $28,127
Growth on starting balance: $28,127 × 7% = $1,969
Growth on new contributions: $7,320 × 7% × 0.5 = $256
Year 5 Balance: $37,672
At retirement (age 65): You'll have approximately $1,460,000. You contributed $360,000, employer added $108,000, and investment growth provided $992,000 (68% of your total).
Example 2: Late Start with Existing Balance
Scenario: You're 40 with $85,000 already saved. Earning $90,000/year, contributing 15% ($13,500), employer matches 100% on first 3% ($2,700). Expecting 6% returns and 2% raises.
Year 1 Calculation:
Starting balance: $85,000
Growth on existing: $85,000 × 6% = $5,100
Your contribution: $13,500
Employer match: $2,700
Growth on contributions: $16,200 × 6% × 0.5 = $486
Year 1 Balance: $107,286
Year 10 (Age 50):
Salary: $109,688
Now eligible for catch-up ($7,500 extra)
Can contribute: $23,500 limit + $7,500 catch-up = $31,000
Your contribution: $16,453 (15% of salary)
Employer match: $3,291
Year 10 Balance: $265,489
At retirement (age 65): You'll have about $832,000. Despite starting late, steady contributions and catch-up contributions after 50 help you build solid savings.
Example 3: High Earner Maxing Contributions
Scenario: You're 55, earning $200,000/year, and max out contributions at $31,000/year ($23,500 + $7,500 catch-up). Employer matches 50% up to 6% ($6,000). You have $450,000 saved and expect 8% returns.
Year 1 Calculation (Age 55):
Starting balance: $450,000
Growth on existing: $450,000 × 8% = $36,000
Your maximum contribution: $31,000
Employer match: $6,000 (50% of 6% of $200k)
Growth on contributions: $37,000 × 8% × 0.5 = $1,480
Year 1 Balance: $524,480
Year 6 (Age 60-61):
Now eligible for super catch-up: $34,750 total limit
Your contribution: $34,750
Employer match: $6,000
Your total balance has grown a lot
Year 6 Balance: $940,567
At retirement (age 65): You'll have approximately $1,280,000. Maxing out contributions in your final working years, especially with enhanced catch-up amounts at 60-63, dramatically accelerates growth through both higher contributions and compounding on a larger base.
Interpreting Your 401(k) Results
What your numbers mean and how to plan your retirement
Your projected balance tells you how much you'll have saved by retirement. But what matters more is whether that amount provides enough retirement income. Financial planners use the 4% rule: withdraw 4% of your balance annually for a 30-year retirement with high confidence your money won't run out.
Retirement Readiness Benchmarks
| Age | Target Multiple | $75K Salary Example | Status |
|---|---|---|---|
| 30 | 1x salary | $75,000 | On track |
| 40 | 3x salary | $225,000 | Good progress |
| 50 | 6x salary | $450,000 | Strong position |
| 60 | 8x salary | $600,000 | Very strong |
| 65 | 10x salary | $750,000 | Retirement ready |
What Factors Affect Your 401(k) Balance
Time Until Retirement
Your age dramatically impacts results. A 25-year-old contributing $6,000/year reaches $1.2M by 65 at 7% returns. Starting at 45 with the same contribution yields only $262,000. Each decade delayed cuts your retirement savings by 50-60%.
Investment Returns
Return rate massively compounds over time. $10,000/year for 30 years at 6% = $790,000. At 8% = $1.13M. At 10% = $1.64M. Just 2% difference doubles your money. Aggressive stock portfolios beat conservative bonds over 20+ year horizons.
Contribution Percentage
Every 1% increase adds a lot. On $80,000 salary, 10% ($8,000/year) grows to $656,000 in 25 years at 7%. At 15% ($12,000/year): $984,000. At 20% ($16,000/year): $1.31M. Raising contributions beats trying to time the market.
Employer Match Utilization
Not contributing enough to get full match wastes thousands. A 50% match on 6% of $70,000 is $2,100/year. Over 30 years at 7%, that $2,100 grows to $199,000. Missing it means leaving $199,000 unclaimed - no investment strategy compensates for that.
Fees and Expense Ratios
High-fee funds (1.5%+) erode returns. $500,000 growing at 7% minus 0.5% fees = $1.32M in 20 years. At 1.5% fees = $1.06M. You lose $260,000 (20%) to unnecessary fees. Choose index funds with 0.05-0.20% expense ratios when possible.
Vesting Schedules
Leaving before fully vested forfeits employer match. With 4-year graded vesting (25% per year), leaving after 2 years means you keep only 50% of employer contributions. Stay until 100% vested when possible or factor lost match into job change calculations.
Actionable Advice Based on Your Results
If You're On Track or Ahead
- ✓Maintain your contribution rate (don't reduce even during market downturns)
- ✓Consider maxing out contributions ($23,500/year) if income allows
- ✓Open a Roth IRA for additional tax-free growth ($7,000/year limit)
- ✓Review asset allocation annually (shift bonds as you near retirement)
- ✓Explore other goals: taxable brokerage, real estate, education savings
If You're Behind Your Target
- !Increase contributions by 1-2% immediately (won't impact lifestyle much)
- !Commit raises/bonuses to 401(k) before spending (50-100% increase rule)
- !If 50+, max catch-up contributions ($7,500 extra = $135,000 over 10 years)
- !Delay retirement 2-3 years (lets savings grow while not drawing down)
- !Consider side income to boost contributions without lifestyle cuts
- !Consult a financial advisor for catch-up strategies and tax optimization
Related Retirement Savings Concepts
Understanding how 401(k) plans fit into your overall retirement strategy
Your 401(k) is just one retirement tool. Combining multiple account types creates tax diversification and flexibility. Each has different contribution limits, tax treatment, and withdrawal rules.
Retirement Account Comparison
| Account Type | 2026 Limit | Tax Treatment | Best For |
|---|---|---|---|
| Traditional 401(k) | $23,500 ($31,000 if 50+) | Tax-deferred (pay taxes at withdrawal) | High earners in peak earning years |
| Roth 401(k) | $23,500 ($31,000 if 50+) | After-tax (withdrawals tax-free) | Young workers expecting higher future tax rates |
| Traditional IRA | $7,000 ($8,000 if 50+) | Tax-deferred (may be deductible) | No employer plan, or supplementing 401(k) |
| Roth IRA | $7,000 ($8,000 if 50+) | After-tax (withdrawals tax-free) | Income under $161K single/$240K married |
| HSA | $4,300 individual/$8,550 family | Triple tax-free (deductible, grows tax-free, withdrawals tax-free for medical) | High-deductible health plan holders |
Traditional vs Roth 401(k)
Traditional reduces your taxable income now (22% bracket saves $5,170 on $23,500 contribution). Roth doesn't, but withdrawals are completely tax-free in retirement.
Choose Traditional if: You're in high tax bracket now (24%+) and expect lower bracket in retirement. Choose Roth if: You're young in lower bracket (12-22%) or expect higher future tax rates.
401(k) vs IRA
401(k) allows $23,500/year contributions (3x more than IRA's $7,000) and offers employer matching. IRAs provide unlimited investment choices compared to 401(k)'s limited menu.
Best strategy: Max 401(k) to employer match first, then use our Roth IRA Calculator to maximize tax-free growth potential, then max remaining 401(k) space. This optimizes free money and investment flexibility.
Pension Plans
Traditional pensions (defined benefit) guarantee monthly income for life based on salary and years of service. 401(k)s (defined contribution) depend entirely on how much you save and invest.
If you have a pension, you can be more aggressive with 401(k) investments since pension provides stable base income. Calculate your pension benefit to determine additional 401(k) savings needed.
HSA as Retirement Account
Health Savings Accounts offer triple tax benefit: contributions are deductible, growth is tax-free, and medical withdrawals are tax-free. After age 65, you can withdraw for any reason (taxed like traditional IRA).
Max your HSA if eligible ($8,550 family limit). Pay medical expenses out-of-pocket, save receipts, and let HSA grow. Average couple needs $315,000 for retirement healthcare costs.
Frequently Asked Questions
Common 401(k) questions answered with specific guidance
What's a good 401(k) balance for my age?
By age 30, aim for 1x your annual salary saved. Age 40: 3x salary. Age 50: 6x salary. Age 60: 8x salary. Age 65: 10x salary. These benchmarks assume you started saving around age 25 and save 15% consistently. If you're earning $75,000, you should have roughly $75,000 by 30, $225,000 by 40, $450,000 by 50, $600,000 by 60, and $750,000 by 65. Behind schedule? Increase contributions 1-2% annually and max catch-up contributions after 50.
How much should I contribute to my 401(k)?
Minimum: contribute enough to get full employer match (typically 3-6% of salary). If you can't afford that, contribute at least 1% and increase 1% annually. Ideal: 15-20% of gross income including employer match. If your employer matches 3% and you contribute 12%, you're at 15% total. Maxing out: $23,500/year ($31,000 if 50+, $34,750 if 60-63). If under 30, prioritize employer match first, then emergency fund, then increase 401(k) to 15%+.
Can I have both a 401(k) and an IRA?
Yes, absolutely! They have separate contribution limits. You can contribute $23,500 to your 401(k) AND $7,000 to an IRA (Roth or Traditional) in 2026. That's $30,500 total annual retirement savings if under 50, $39,000 if 50+. The optimal strategy: contribute to 401(k) up to employer match, then explore our IRA Calculator to compare Traditional vs Roth benefits and determine your best contribution strategy. This sequence captures free employer money first, then optimizes tax flexibility, then maximizes tax-deferred growth.
What happens to my 401(k) if I change jobs?
You have four options: (1) Leave it with old employer if balance exceeds $5,000 - simple but you'll have multiple accounts to track. (2) Roll over to new employer's 401(k) - consolidates accounts, access to new investment options. (3) Roll over to Traditional IRA - unlimited investment choices, lower fees, but can't take 401(k) loans anymore. (4) Cash out - worst option, you'll pay income tax plus 10% penalty if under 59½. Never cash out. Rolling to new employer or IRA keeps money growing tax-free. Check vesting - unvested employer match stays with old employer.
When can I withdraw from my 401(k) without penalty?
Standard: Age 59½ for penalty-free withdrawals (still pay income tax). Earlier options: Rule of 55 lets you withdraw penalty-free if you leave your job at 55+ (only from that employer's 401(k)). Hardship withdrawals allowed for immediate financial need (medical, prevent foreclosure) but still face 10% penalty. Substantially Equal Periodic Payments (SEPP/72(t)) lets you withdraw before 59½ penalty-free if you commit to fixed annual withdrawals for 5+ years. 401(k) loans let you borrow up to $50,000 or 50% of vested balance, must repay with interest. Avoid early withdrawals - you lose decades of compound growth.
Should I choose Traditional or Roth 401(k)?
Choose Traditional if you're in 24%+ tax bracket now and expect to be in 12-22% bracket in retirement - the upfront tax savings are worth more. Choose Roth if you're young in 12-22% bracket or believe tax rates will increase - pay taxes now at lower rate, enjoy tax-free withdrawals forever. If unsure, split 50/50 for tax diversification. Example: earning $85,000 (22% bracket), Traditional 401(k) saves you $5,170 tax on $23,500 contribution. If you expect higher taxes in retirement or want tax-free withdrawals, Roth is better despite no immediate savings. Your employer match always goes into Traditional 401(k) regardless of your choice.
What if I can't afford to max out my 401(k)?
Start small and increase gradually. Contributing even 1% makes a difference - on $60,000 salary, that's $600/year which becomes $57,000 over 30 years at 7% returns. Set automatic 1% annual increases when you get raises - you won't notice the difference but you'll reach 15-20% within a decade. Prioritize in this order: (1) Contribute enough for full employer match (free money). (2) Build 3-month emergency fund. (3) Pay off high-interest debt (credit cards). (4) Increase 401(k) to 10-15%. (5) Max out 401(k) once income allows. If choosing between maxing 401(k) vs other goals, contribute to match, then split additional savings between debt payoff, emergency fund, and increased 401(k) contributions.
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