401(k) Calculator

How to use this calculator

Fill in each field to build a realistic 401(k) projection:

• Current age and retirement age — determines how many years your balance compounds
• Current 401(k) balance — the amount already in your account today
• Annual salary — used to calculate your contribution amount in dollars
• Contribution percentage — the share of your salary you contribute; enter the number before any employer match
• Employer match — the percentage your employer contributes (up to any cap they set); check your plan summary or HR documents
• Expected annual return — your assumed average yearly return; 7% is a common moderate estimate for a long-horizon diversified portfolio

You'll see your projected balance at retirement and a split showing how much came from total contributions versus investment growth. Adjust the contribution percentage to see how increasing it by even 1–2% changes the outcome over decades.

How 401(k) growth works

Your 401(k) balance grows through two mechanisms: ongoing contributions (yours plus any employer match) and compounding investment returns on the money already in the account.

In the early years, contributions are the primary driver because the balance is relatively small. Over time, as the balance grows, investment returns start generating more dollars per year than your new contributions — and those returns then earn their own returns in subsequent years. Over a 30-year accumulation period, it is common for investment growth to account for the majority of the final balance, even with consistent contributions.

The employer match amplifies this significantly. If your employer matches 50% of contributions up to 6% of salary, and you contribute 6%, your effective return before any market gains is already meaningful — you've added 50% to every contributed dollar before it's invested. Capturing the full match is one of the best financial decisions available to employees.

A traditional 401(k) also provides an immediate tax benefit: contributions reduce your taxable income in the year they're made. The tax deferral means more dollars stay invested and compounding now, even though withdrawals in retirement will be taxed as ordinary income.

Worked example — step by step

A 30-year-old with a $25,000 balance, earning a $70,000 salary, contributing 8% ($5,600/year), with a 4% employer match ($2,800/year), at a 7% annual return, retiring at 65:

• Years to retirement: 35
• Total annual contribution: $5,600 + $2,800 = $8,400/year = $700/month
• Future value of $25,000 current balance at 7% for 35 years: ≈ $265,500
• Future value of $700/month contributions at 7% for 35 years: ≈ $1,130,000
• Combined projected balance: ≈ $1,395,500
• Total contributed over 35 years: $8,400 × 35 = $294,000
• Growth from investment returns: ≈ $1,101,500 (roughly 79% of the total)

Now consider what happens if this person didn't capture the employer match — contributing only 4% instead of 8%, and receiving no match. The projected balance at 65 drops to roughly $680,000 — less than half — simply from not taking free employer contributions.

How to interpret your result

The projected balance is a pre-tax nominal figure. Withdrawals from a traditional 401(k) in retirement are taxed as ordinary income, so your actual spendable amount will be less. The tax due depends on your retirement income level and tax bracket at that time. A Roth 401(k), by contrast, grows tax-free, and qualified withdrawals are not taxed.

The result also doesn't account for investment fees. Expense ratios on funds held in your 401(k) reduce your effective return. A 1% annual fee on a 7% return effectively reduces growth to 6%. Over 35 years, that 1% difference in fees can reduce the final balance by 20–25%. Favor low-cost index funds where your plan offers them.

To convert the projected balance to an estimated annual retirement income, multiply by 4% (the 4% rule). On a $1.4 million balance, that's roughly $56,000/year before taxes. Add expected Social Security income (estimable at ssa.gov) for a fuller picture of retirement income.

Common mistakes to avoid

• Not contributing enough to get the full employer match. The match is guaranteed immediate return on your contribution. Contributing below the match threshold is leaving part of your compensation on the table.
• Cashing out a 401(k) when changing jobs. Early cash-out triggers income tax plus a 10% early-withdrawal penalty if you're under 59½, and eliminates all future compounding on that money. Rolling over to an IRA or your new employer's plan preserves the tax-deferred status.
• Choosing overly conservative investments too early. Holding mostly bonds or cash in a 401(k) when you have 20–30 years until retirement sacrifices growth. A long time horizon allows your portfolio to weather market downturns while capturing long-run equity growth.
• Ignoring expense ratios. Check the expense ratios of your plan's investment options. Actively managed funds often carry 1%+ in annual fees; index funds frequently charge under 0.1%. Over decades, this difference compounds into very large dollar amounts.
• Using an unrealistic return rate. Assuming 10–12% returns in this calculator produces an optimistic projection that may not materialize. A long-term diversified portfolio is more reliably modeled at 6–7% before fees, or 5–6% after a typical expense ratio.

Projections are estimates and not investment advice. Markets fluctuate and returns are not guaranteed. Consult a financial advisor for personalized retirement planning.