A 401(k) is a tax-advantaged retirement savings plan offered by employers. You contribute a percentage of your pre-tax salary, reducing your taxable income. Many employers match a portion of your contributions. The money grows tax-deferred until withdrawal in retirement.

How much should I contribute to my 401(k)?

Financial advisors typically recommend contributing 10-15% of your salary to retirement. At minimum, contribute enough to get your full employer match - that's free money. The 2024 401(k) contribution limit is $23,000 ($30,500 if you're 50 or older).

What is an employer match?

An employer match is when your company contributes money to your 401(k) based on how much you contribute. For example, a 50% match up to 6% of salary means if you contribute 6%, your employer adds another 3%. This is essentially free money toward your retirement.

What annual return should I assume?

A diversified stock portfolio has historically returned about 7% annually after inflation. Conservative estimates use 5-6%, while aggressive projections might use 8-10%. Our calculator defaults to 7% as a moderate assumption for long-term planning.

How does compound interest affect my 401(k)?

Compound interest means you earn returns on both your contributions AND previous returns. Over decades, this creates exponential growth. That's why starting early is so powerful - a 25-year-old who contributes for 10 years may accumulate more than someone who starts at 35 and contributes for 30 years.

Is this 401(k) calculator accurate?

This calculator provides estimates based on your inputs and assumes consistent returns and contributions. Real-world results vary due to market fluctuations, changing contribution rates, job changes, and other factors. Use this as a planning tool, not a guarantee.

401(k) Calculator | Free Retirement Savings & Growth Estimator

What is a 401(k) Calculator?

A 401(k) calculator helps you estimate how much money you'll have saved by retirement based on your contributions, employer match, investment returns, and time horizon. Our calculator factors in salary growth and shows you exactly how your contributions and compound growth combine to build your retirement nest egg. Use it to see the power of starting early and maximizing your employer match.

Why Use Our 401(k) Calculator?

Employer Match Included: Factor in your company's matching contribution
Salary Growth: Account for annual raises over your career
Visual Growth Chart: See your balance grow year by year
Detailed Breakdown: View contributions vs. investment growth separately
100% Private: All calculations happen in your browser - no data sent to servers

Understanding 401(k) Contributions

Employee Contribution: The percentage of your salary you choose to contribute. Pre-tax contributions reduce your taxable income now.

Employer Match: Many employers match a portion of your contributions - this is free money you shouldn't leave on the table.

Match Limit: Employers typically match up to a certain percentage of your salary (e.g., 50% match up to 6% of salary = 3% extra).

Contribution Limits: For 2024, you can contribute up to $23,000 ($30,500 if 50+). Employer contributions don't count toward this limit.

The Power of Compound Growth

Time is Your Greatest Asset: The earlier you start, the more time compound interest has to work. Starting at 25 vs. 35 can mean hundreds of thousands more at retirement.

Returns on Returns: You don't just earn returns on your contributions - you earn returns on previous returns, creating exponential growth.

Tax-Deferred Growth: 401(k) investments grow without annual taxes, allowing more of your money to compound.

401(k) Planning Tips

Get the Full Match: Always contribute at least enough to get your full employer match.
Increase with Raises: When you get a raise, increase your contribution percentage.
Diversify Investments: Spread your 401(k) across different asset classes based on your age and risk tolerance.
Consider Roth 401(k): If your employer offers it, consider contributing to a Roth 401(k) for tax-free withdrawals in retirement.
Review Annually: Check your 401(k) allocation and contribution rate at least once a year.

Frequently Asked Questions

When can I withdraw from my 401(k)?

You can withdraw penalty-free at age 59½. Earlier withdrawals typically incur a 10% penalty plus income taxes, though exceptions exist for hardship, disability, or substantially equal payments.

What happens to my 401(k) if I change jobs?

You have options: leave it with your old employer, roll it into your new employer's 401(k), roll it into an IRA, or cash out (not recommended due to taxes and penalties).

Should I prioritize 401(k) or pay off debt?

Generally, contribute enough to get the full employer match first (free money), then focus on high-interest debt. After that, maximize retirement contributions. The math depends on your debt interest rates.

Is a 7% return realistic?

The S&P 500 has historically returned about 10% annually before inflation, or 7% after inflation. While past performance doesn't guarantee future results, 7% is a commonly used moderate assumption for long-term planning.

401(k) Retirement Calculator