401k Calculator
Calculate 401k growth projections, employer match value, and retirement savings. See how contributions compound over time.
Your Contribution
Employer Match
Growth Assumptions
Balance Breakdown
Total at Retirement
$2,018,088
Milestone Projections
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About This Calculator
Your 401(k) is likely the most powerful wealth-building tool you have access to, yet most people drastically underestimate its potential. With tax-deferred growth, employer matching (free money!), and decades of compound interest working in your favor, a well-managed 401(k) can grow from modest contributions into a multi-million dollar retirement nest egg.
The 401(k) Calculator shows you exactly how your retirement savings will grow over time. Enter your current balance, contribution rate, and employer match details to see projections for when you will reach key milestones like $100,000, $500,000, and $1,000,000. The calculator factors in salary growth, investment returns, and IRS contribution limits to give you realistic projections.
The Power of the Employer Match: If your employer matches 50% of contributions up to 6% of your salary, and you earn $75,000, contributing the full 6% ($4,500) gets you an extra $2,250 per year for free. Over 35 years at 7% returns, that employer match alone grows to over $330,000. Not contributing enough to get the full match is literally leaving money on the table.
2025 Contribution Limits: The IRS allows contributions of up to $23,500 per year ($31,000 if you are 50 or older). Maximizing your contributions early in your career has an outsized impact due to compound growth.
Whether you are just starting your career or approaching retirement, this calculator helps you optimize your 401(k) strategy. For broader retirement planning, explore our Retirement Calculator, or see how compound interest works with our Compound Interest Calculator. If you are considering a Roth IRA alongside your 401(k), check our Investment Calculator.
How to Use the 401k Calculator
- 1Enter your current age and target retirement age to establish your savings timeline.
- 2Input your current 401(k) balance including all vested employer contributions.
- 3Add your annual salary to calculate contribution amounts and employer match.
- 4Adjust the contribution percentage slider to see how different rates affect your outcome.
- 5Enter your employer match details: the match percentage (e.g., 50%) and the cap (e.g., up to 6% of salary).
- 6Select an expected return rate based on your investment allocation (7% is typical for a balanced portfolio).
- 7Review your projected balance, contribution breakdown, and key milestones.
How 401(k) Employer Matching Works
Employer matching is essentially free money added to your retirement savings. Understanding your match formula helps you maximize this benefit.
Common Employer Match Formulas
| Match Type | What It Means | Example (on $75,000 salary) |
|---|---|---|
| 100% up to 3% | Dollar-for-dollar match on first 3% | Contribute $2,250, get $2,250 match |
| 50% up to 6% | $0.50 per $1 on first 6% | Contribute $4,500, get $2,250 match |
| 100% up to 4%, 50% on next 2% | Tiered matching | Contribute $4,500, get $3,750 match |
| 25% up to 8% | Lower percentage, higher cap | Contribute $6,000, get $1,500 match |
Vesting Schedules
Not all employer match money is immediately yours. Vesting schedules determine when you own the matched funds:
Immediate Vesting: You own 100% of employer contributions right away Cliff Vesting: 0% until a set date (often 3 years), then 100% Graded Vesting: Gradual ownership increase over 2-6 years
Example 6-year graded vesting:
- Year 1: 0%
- Year 2: 20%
- Year 3: 40%
- Year 4: 60%
- Year 5: 80%
- Year 6: 100%
The True Value of Matching
A 50% match on 6% of salary is equivalent to an instant 50% return on that portion of your investment. No other investment offers guaranteed returns like this. Always contribute at least enough to capture your full employer match before considering other investment options.
2025 401(k) Contribution Limits
The IRS adjusts 401(k) contribution limits annually. Here are the current limits and strategies for maximizing them.
2025 Contribution Limits
| Limit Type | Under 50 | Age 50+ |
|---|---|---|
| Employee Contribution | $23,500 | $31,000 |
| Catch-Up Contribution | N/A | $7,500 |
| Total Including Employer | $70,000 | $77,500 |
Strategies for Hitting the Max
Front-Loading: Contributing more early in the year gets money invested sooner, potentially capturing more market growth.
Even Distribution: Contributing evenly throughout the year ensures you capture employer matches on each paycheck (important if your employer matches per-paycheck).
Catch-Up Planning: Starting at 50, you can contribute an extra $7,500 per year. Plan for this boost in your retirement strategy.
Mega Backdoor Roth
Some plans allow after-tax contributions beyond the $23,500 limit (up to the $70,000 total). These can sometimes be converted to Roth, creating a "Mega Backdoor Roth" opportunity. Check if your plan allows this.
What If You Cannot Max Out?
| Contribution Level | Strategy |
|---|---|
| Minimum | At least enough for full employer match |
| Good | 10-15% of salary |
| Better | 15-20% of salary |
| Best | Max out annual limit |
Even small increases compound significantly over time. Going from 10% to 12% contributions over 30 years can add $100,000+ to your final balance.
Traditional vs. Roth 401(k)
Many employers now offer both Traditional and Roth 401(k) options. Understanding the difference helps you choose the right strategy.
Key Differences
| Feature | Traditional 401(k) | Roth 401(k) |
|---|---|---|
| Tax on Contributions | Pre-tax (deducted from paycheck) | After-tax (no deduction) |
| Tax on Growth | Tax-deferred | Tax-free |
| Tax on Withdrawals | Taxed as income | Tax-free (if qualified) |
| Required Minimum Distributions | Yes, starting at 73 | Yes, but can roll to Roth IRA to avoid |
When to Choose Traditional
- You are in a high tax bracket now and expect lower taxes in retirement
- You want to maximize current take-home pay reduction for tax savings
- You need the tax deduction to qualify for other benefits
- You are uncertain about future tax rates
When to Choose Roth
- You are in a lower tax bracket now than you expect in retirement
- You want tax-free income in retirement for flexibility
- You are young with decades of tax-free growth ahead
- You want to leave tax-free money to heirs
The Split Strategy
Many financial advisors recommend splitting contributions between Traditional and Roth to hedge against future tax uncertainty. For example, 50/50 or 60/40 splits provide tax diversification.
Important: Employer matches always go into the Traditional side, even if you contribute to Roth.
Investment Options Within Your 401(k)
Your 401(k) balance growth depends heavily on how you invest the money. Most plans offer several fund categories.
Common 401(k) Investment Options
| Fund Type | Risk Level | Expected Return | Best For |
|---|---|---|---|
| Money Market | Very Low | 2-4% | Short-term, near retirement |
| Bond Funds | Low-Medium | 3-5% | Stability, income |
| Target Date Funds | Varies | 5-7% | Hands-off investors |
| S&P 500 Index | Medium-High | 7-10% | Long-term growth |
| International Funds | High | 6-9% | Diversification |
| Small Cap Funds | High | 7-12% | Aggressive growth |
Asset Allocation by Age
A common rule of thumb: Subtract your age from 110 to get your stock percentage.
| Age | Stocks | Bonds | Example |
|---|---|---|---|
| 25 | 85% | 15% | Aggressive growth focus |
| 35 | 75% | 25% | Growth with some stability |
| 45 | 65% | 35% | Balanced approach |
| 55 | 55% | 45% | Preservation begins |
| 65 | 45% | 55% | Income and stability focus |
Watch Out for Fees
401(k) funds have expense ratios that eat into returns:
| Expense Ratio | Cost on $500,000 over 20 years |
|---|---|
| 0.10% (index fund) | ~$10,000 |
| 0.50% (average) | ~$50,000 |
| 1.00% (high) | ~$100,000 |
| 1.50% (very high) | ~$150,000 |
Always choose lower-cost index funds when available. The difference compounds dramatically over time.
Common 401(k) Mistakes to Avoid
Small mistakes in your 401(k) strategy can cost hundreds of thousands of dollars over your career.
The Biggest Mistakes
1. Not Contributing Enough for the Full Match Leaving employer match money on the table is throwing away free money. This is the single biggest mistake.
2. Cashing Out When Changing Jobs Taking a cash distribution triggers:
- Income taxes on the full amount
- 10% early withdrawal penalty if under 59.5
- Loss of decades of compound growth
A $50,000 cash-out at age 30 could cost you $400,000+ by retirement.
3. Being Too Conservative When Young At 25, having 100% in bonds or stable value funds means missing decades of stock market growth. Young investors can afford volatility.
4. Being Too Aggressive Near Retirement Conversely, having 100% in stocks at 60 risks a major loss right before you need the money.
5. Not Increasing Contributions With Raises Got a 3% raise? Increase your 401(k) contribution by 1-2%. You will not miss money you never saw in your paycheck.
6. Taking 401(k) Loans While tempting, 401(k) loans:
- Remove money from the market during growth periods
- Must be repaid quickly if you leave your job
- Can trigger taxes and penalties if not repaid
7. Ignoring Your 401(k) Set it and forget it is fine for contributions, but review your investment allocation annually.
401(k) Rollovers and Job Changes
Changing jobs? Here is what to do with your old 401(k).
Your Options
| Option | Pros | Cons |
|---|---|---|
| Leave in old plan | Simple, no action needed | Cannot contribute more, may have limited options |
| Roll to new employer 401(k) | Consolidation, may have better funds | New plan may have worse options or higher fees |
| Roll to Traditional IRA | Maximum investment options, often lower fees | No 401(k) loan option |
| Roll to Roth IRA | Tax-free growth, no RMDs | Pay taxes now on conversion |
| Cash out | Immediate access | Taxes + penalties, devastating to retirement |
The Rollover Process
- Open an IRA (if rolling to IRA) or confirm new 401(k) accepts rollovers
- Request a direct rollover (trustee-to-trustee) to avoid withholding
- Complete any required paperwork
- Verify funds arrive and are invested appropriately
Warning: Indirect rollovers (check made to you) trigger 20% withholding and must be completed within 60 days. Always request direct rollover.
When to Consider Roth Conversion
Rolling a Traditional 401(k) to a Roth IRA means paying taxes now for tax-free growth later. This makes sense when:
- You are in a low tax bracket (early career, job loss, sabbatical)
- You expect higher taxes in retirement
- You have cash outside the account to pay the taxes
- You want to leave tax-free money to heirs
Use our Income Tax Calculator to estimate the tax impact of a Roth conversion.
Pro Tips
- 💡Always contribute at least enough to get your full employer match - it is free money with an instant 50-100% return.
- 💡Increase your contribution by 1% each year or with each raise - you will not miss what you never see in your paycheck.
- 💡Choose low-cost index funds when available - a 1% fee difference can cost $100,000+ over your career.
- 💡Do not cash out your 401(k) when changing jobs - roll it to an IRA or new 401(k) to avoid taxes and penalties.
- 💡Review your asset allocation annually and rebalance if needed to maintain your target risk level.
- 💡Consider a Roth 401(k) if your employer offers one, especially if you are early in your career or in a lower tax bracket.
- 💡If you are 50 or older, take advantage of catch-up contributions ($7,500 extra per year in 2025).
- 💡Keep beneficiary designations up to date, especially after major life changes like marriage, divorce, or having children.
- 💡Don not be too conservative when young - you have decades to recover from market downturns and need growth.
- 💡Avoid taking 401(k) loans except as a last resort - you lose market growth and create tax risks if you leave your job.
- 💡If your plan has high fees or poor investment options, still contribute enough for the match, then prioritize an IRA for additional savings.
- 💡Run this calculator annually with updated salary and balance to track your progress toward retirement goals.
Frequently Asked Questions
At minimum, contribute enough to get your full employer match (this is free money). Beyond that, aim for 10-15% of your salary including the match. If you can afford more, gradually increase toward the annual maximum ($23,500 in 2025, or $31,000 if 50+). A good strategy is to increase your contribution by 1% each year or with each raise until you reach your target. Even small increases compound dramatically over decades.
