401(k) Calculator

Calculate your 401(k) savings growth, estimate employer matching, and plan your retirement.

Personal Information

401(k) Contributions

6%
Projected 401(k) Balance
$987,500
At retirement
Total Contributions
$215,000
Over career
Employer Match
$107,500
Free money
Investment Growth
$665,000
Compound growth

Contribution Breakdown

401(k) Growth Projection

Employer Match Details

Your employer matches 50% of your contributions up to 6% of your salary.

With your current salary of $75,000 and contribution rate of 6%:

  • Your annual contribution: $4,500
  • Employer match: $2,250 (50% of your first 6%)
  • Total annual contribution: $6,750
Tip: You're getting the full employer match! Continue contributing at least 6% to maximize free money from your employer.
Optimization Strategy
  • Increase Contribution Rate: Consider increasing your contribution rate to 10% to boost your retirement savings by $215,000
  • Annual Contribution Increase: Increase your contribution by 1% annually to keep up with salary growth
  • Review Investments: Ensure your investment allocation aligns with your risk tolerance and retirement goals
  • Catch-Up Contributions: After age 50, take advantage of catch-up contributions ($7,500 in 2025)
Annual Projections (First 5 Years)
Year Age Salary Your Contribution Employer Match Account Balance
2025 35 $75,000 $4,500 $2,250 $31,750
2026 36 $77,250 $4,635 $2,318 $44,325
2027 37 $79,568 $4,774 $2,387 $57,645
2028 38 $81,955 $4,917 $2,459 $71,785
2029 39 $84,413 $5,065 $2,532 $86,815

Understanding 401(k) Plans

A 401(k) is an employer-sponsored retirement savings plan that allows employees to save and invest a portion of their paycheck before taxes are taken out.

Key Features of 401(k) Plans

Tax Advantages

Contributions are made pre-tax, reducing your taxable income. Taxes are paid upon withdrawal in retirement.

Employer Matching

Many employers match a portion of employee contributions, essentially providing free money toward retirement.

Investment Growth

Funds in 401(k) accounts grow tax-deferred, allowing for compound growth over time.

Contribution Limits

For 2025, the contribution limit is $23,000 ($30,500 for those 50 and older).

401(k) Contribution Formula

Annual Contribution = (Employee Contribution Rate × Salary) + (Employer Match Rate × Salary)
End Balance = Start Balance × (1 + Return Rate) + Annual Contribution

Maximizing Your 401(k)

  • Contribute Enough to Get Full Match: Not getting the full employer match is leaving free money on the table.
  • Increase Contributions Gradually: Increase your contribution rate by 1% each year until you reach 15%.
  • Take Advantage of Catch-Up Contributions: If you're 50 or older, you can contribute an additional $7,500 in 2025.
  • Review Investments Annually: Ensure your investment allocation aligns with your retirement goals.
  • Avoid Early Withdrawals: Early withdrawals incur taxes and penalties, reducing your retirement savings.

Frequently Asked Questions

Q: What is vesting in a 401(k) plan?

A: Vesting refers to your ownership of employer-contributed funds. Some plans have a vesting schedule where you gradually gain ownership over several years.

Q: Can I borrow from my 401(k)?

A: Many plans allow loans, but it's generally not recommended as it reduces your retirement savings and growth potential.

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

A: You can leave it with your former employer, roll it over to your new employer's plan, roll it over to an IRA, or cash it out (not recommended due to taxes and penalties).

Understanding 401(k) Plans

A 401(k) is an employer-sponsored retirement savings plan that allows employees to save and invest a portion of their paycheck before taxes are taken out.

Key Features of 401(k) Plans

Tax Advantages

Contributions are made pre-tax, reducing your taxable income. Taxes are paid upon withdrawal in retirement.

Employer Matching

Many employers match a portion of employee contributions, essentially providing free money toward retirement.

Investment Growth

Funds in 401(k) accounts grow tax-deferred, allowing for compound growth over time.

Contribution Limits

For 2025, the contribution limit is $23,000 ($30,500 for those 50 and older).

401(k) Contribution Formula

Annual Contribution = (Employee Contribution Rate × Salary) + (Employer Match Rate × Salary)
End Balance = Start Balance × (1 + Return Rate) + Annual Contribution

Maximizing Your 401(k)

  • Contribute Enough to Get Full Match: Not getting the full employer match is leaving free money on the table.
  • Increase Contributions Gradually: Increase your contribution rate by 1% each year until you reach 15%.
  • Take Advantage of Catch-Up Contributions: If you're 50 or older, you can contribute an additional $7,500 in 2025.
  • Review Investments Annually: Ensure your investment allocation aligns with your retirement goals.
  • Avoid Early Withdrawals: Early withdrawals incur taxes and penalties, reducing your retirement savings.

Frequently Asked Questions

Q: What is vesting in a 401(k) plan?

A: Vesting refers to your ownership of employer-contributed funds. Some plans have a vesting schedule where you gradually gain ownership over several years.

Q: Can I borrow from my 401(k)?

A: Many plans allow loans, but it's generally not recommended as it reduces your retirement savings and growth potential.

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

A: You can leave it with your former employer, roll it over to your new employer's plan, roll it over to an IRA, or cash it out (not recommended due to taxes and penalties).

Common Employer Match Formulas

  • 50% match on first 6% Most Common
  • 100% match on first 3%
  • 50% match on first 8%
  • 100% match on first 4% + 50% on next 2%
  • Dollar-for-dollar up to 4%
* About 98% of employers offer matching contributions to encourage participation.