About the 401K Calculator
A 401(k) calculator projects your retirement balance including employer matching contributions, which are the highest-return component of most people's retirement saving. The match is an immediate return on contribution that no investment can reliably match.
The formula
Annual contribution = salary · (your % + match %)Your contribution and the employer match are both percentages of salary. The combined amount grows at the assumed return rate until retirement.
How to use this calculator
- 1Enter your Annual Salary ($). The field starts at
70000, which you can overwrite. - 2Enter your Your Contribution (%). The field starts at
6, which you can overwrite. - 3Enter your Employer Match (%). The field starts at
3, which you can overwrite. - 4Enter your Current Balance ($). The field starts at
25000, which you can overwrite. - 5Enter your Annual Return (%). The field starts at
7, which you can overwrite. - 6Enter your Years Until Retirement. The field starts at
25, which you can overwrite. - 7Read the result straight away — it recalculates as you type, so there is no button to press. Use Share to copy a link that reopens the page with your exact numbers filled in.
Worked example
| Input | Value |
|---|---|
| Annual Salary ($) | 70000 |
| Your Contribution (%) | 6 |
| Employer Match (%) | 3 |
| Current Balance ($) | 25000 |
| Annual Return (%) | 7 |
| Years Until Retirement | 25 |
Result
Projected Balance: $534,154.75
Your Contributions: $105,000
Employer Match: $52,500
Investment Growth: $351,655
Those are the values the page loads with, so you can reproduce this result yourself and then change one field at a time to see what drives the outcome.
Understanding your result
A typical match — 50 percent of contributions up to 6 percent of salary — is an instant 50 percent return on that portion of your money. Contributing less than the full match threshold means declining part of your compensation, which is why capturing the match in full comes before every other savings priority including debt repayment in most cases.
Traditional 401(k) contributions are pre-tax, so they reduce your current taxable income and are taxed on withdrawal. Roth 401(k) contributions are after-tax and withdrawals are tax-free. Which is better depends on whether your tax rate in retirement will be higher or lower than it is now — a genuine unknown, which is why splitting between them is a reasonable hedge.
Things worth knowing
- Contribute at least enough to capture the full employer match. Anything less leaves compensation on the table.
- Check the vesting schedule. Employer contributions may require several years of service before they are fully yours.
- Contribution limits are set annually by the IRS, with higher catch-up limits from age 50.
- Expense ratios inside plan funds vary widely. A 0.5 percent difference compounds into a large sum over decades.
- Rolling an old 401(k) into an IRA on leaving a job usually widens investment choice and lowers fees.
Frequently asked questions
How much should I contribute to my 401(k)?+
At minimum enough to get the full employer match. Beyond that, 15 percent of gross income including the match is a common target for retirement readiness.
How does employer matching work?+
The employer contributes alongside you, typically 50 or 100 percent of your contributions up to a percentage of salary. A 50 percent match on the first 6 percent means contributing 6 percent yields 9 percent total.
Should I choose traditional or Roth 401(k)?+
Traditional reduces taxes now and is taxed on withdrawal; Roth does the reverse. Choose Roth if you expect a higher tax rate in retirement, traditional if lower. Splitting between them hedges the uncertainty.
What is vesting?+
The schedule on which employer contributions become permanently yours. Your own contributions vest immediately, but employer money may require two to six years of service depending on the plan.