401k Calculator
Plan your retirement savings with employer match modeling and year-by-year projections
Calculate your projected 401k balance at retirement. See how employer matching accelerates your wealth and find out how much you need to contribute to reach your retirement goals.
401k Calculator
Your current 401k account balance
Your current annual gross salary
$3,600 / year
✓ Maximizing employer match
2024 IRS limit: $23,000 employee contribution
💰 Employer Match (Free Money!)
Example: "50% match up to 6%" means employer matches 50% of your contributions up to 6% of your salary
Historical S&P 500 average: ~10% annually
Average annual raise to model career progression
Retirement Projection
Projected 401k Balance at Age 65
$1,135,770
After 35 years of contributions and growth
Your Contributions
$217,663
Employer Match
$108,832
Free money! 🎉
Investment Growth
$809,275
Compound returns
Monthly Income
$3,786
4% withdrawal rule
Year-by-Year Projection
| Year | Age | Salary | Your Contrib. | Employer Match | Growth | Balance |
|---|---|---|---|---|---|---|
| 1 | 31 | $60,000 | $3,600 | $1,800 | $378 | $5,778 |
| 2 | 32 | $61,800 | $3,708 | $1,854 | $794 | $12,134 |
| 3 | 33 | $63,654 | $3,819 | $1,910 | $1,250 | $19,113 |
| 4 | 34 | $65,564 | $3,934 | $1,967 | $1,751 | $26,765 |
| 5 | 35 | $67,531 | $4,052 | $2,026 | $2,299 | $35,141 |
| 6 | 36 | $69,556 | $4,173 | $2,087 | $2,898 | $44,300 |
| 7 | 37 | $71,643 | $4,299 | $2,149 | $3,552 | $54,300 |
| 8 | 38 | $73,792 | $4,428 | $2,214 | $4,266 | $65,207 |
| 9 | 39 | $76,006 | $4,560 | $2,280 | $5,043 | $77,091 |
| 10 | 40 | $78,286 | $4,697 | $2,349 | $5,890 | $90,026 |
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🔒 Your Privacy Matters
100% Client-Side Calculations: All calculations are performed locally in your browser. We do not collect, store, or transmit any of your financial data to our servers. Your information stays completely private and secure on your device. This calculator works offline once loaded.
Important Disclaimer
Not Financial Advice: This calculator provides estimates for educational and informational purposes only.
- Results are based on the information you provide
- Actual results may vary based on individual circumstances
- Consult a qualified professional before making financial decisions
Calculation History
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Account Growth Projection
Your Contributions
Employer Match
Investment Growth
How 401k Retirement Plans Work
💰 Don't Leave Free Money on the Table!
Employer matching is the most powerful feature of 401k plans. When your employer offers a match, they're giving you free money for your retirement.
- Common Match: "50% match up to 6% of salary" means if you contribute 6%, your employer adds 3% - that's a 50% instant return!
- Always Contribute Enough: At minimum, contribute enough to get the full match. Anything less is leaving money on the table.
- Match Vesting: Some employers require you to stay for a certain period before the match is fully yours. Check your plan's vesting schedule.
📈 The Power of Compound Growth
Time and compound interest are your greatest allies in retirement savings. The earlier you start, the more your money can grow.
- Historical Returns: The S&P 500 has averaged ~10% annual returns over the long term. Conservative 401k portfolios typically assume 6-8%.
- Start Early: Someone who starts contributing at 25 vs. 35 can end up with twice as much money at retirement, even with the same total contributions.
- Increase Contributions: Try to increase your contribution percentage by 1% each year. You'll barely notice the difference, but it adds up significantly.
Traditional vs Roth 401k
Many employers now offer both Traditional and Roth 401k options. The key difference is when you pay taxes on your contributions and earnings.
| Feature | Traditional 401k | Roth 401k |
|---|---|---|
| Tax Treatment | Contributions are pre-tax (reduces current taxable income) | Contributions are after-tax (no current tax benefit) |
| Withdrawals | Taxed as ordinary income in retirement | Tax-free in retirement (including growth!) |
| Best For | High earners in high tax bracket now, expecting lower tax bracket in retirement | Younger workers, lower earners now, expecting higher income/taxes in retirement |
| Required Distributions | RMDs required at age 73 | RMDs required at age 73 (but can be avoided by rolling to Roth IRA) |
| 2024 Contribution Limit | $23,000 ($30,500 if 50+) | $23,000 ($30,500 if 50+) |
💡 Pro Tip: Many financial advisors recommend diversifying between both Traditional and Roth contributions if possible. This gives you flexibility in retirement to manage your tax burden by choosing which account to withdraw from based on your tax situation.
📊 Tax Implications: What You Need to Know
Understanding the tax implications of your 401k contributions is crucial for maximizing your retirement savings and minimizing your tax burden.
💰 Immediate Tax Savings (Traditional 401k)
Traditional 401k contributions reduce your taxable income dollar-for-dollar. If you earn $80,000 and contribute $10,000, you'll only pay taxes on $70,000.
Example: In the 22% tax bracket, a $10,000 contribution saves you $2,200 in taxes that year. That's like getting a 22% instant return before any investment growth!
📈 Tax-Deferred Growth
Your 401k investments grow tax-free until withdrawal. You won't pay capital gains taxes or dividend taxes on your investments while they're in the account. This allows your money to compound faster.
Example: If your investments earn $5,000 in dividends and capital gains in a taxable account, you might owe $1,000 in taxes. In a 401k, that $5,000 stays invested and continues growing.
💸 Taxes in Retirement (Traditional 401k)
All Traditional 401k withdrawals are taxed as ordinary income at your tax rate in retirement. This includes both contributions and growth.
Strategy: Many retirees are in a lower tax bracket than during working years. If you're in 22% bracket now but expect 12% in retirement, Traditional 401k saves you 10% in taxes!
🎯 Tax-Free Withdrawals (Roth 401k)
Roth 401k contributions are made with after-tax dollars (no immediate tax benefit), but all withdrawals in retirement are 100% tax-free - including growth!
Example: Contribute $10,000/year for 30 years (total $300k) that grows to $1 million. With Roth, you withdraw that $1 million completely tax-free. With Traditional, you'd owe taxes on the full $1 million.
⚠️ Early Withdrawal Penalties
Withdrawing before age 59½ typically triggers a 10% penalty plus ordinary income taxes. On a $20,000 withdrawal in the 22% bracket, you'd lose $6,400 ($2,000 penalty + $4,400 taxes).
Exceptions: No penalty for first-time home purchase (up to $10k), qualified higher education expenses, certain medical expenses, or if you become disabled. Consult a tax advisor before early withdrawal.
📅 Required Minimum Distributions (RMDs)
Both Traditional and Roth 401k accounts require you to start withdrawing money at age 73 (as of 2024). The IRS calculates the minimum you must withdraw based on your account balance and life expectancy.
Strategy: Roth 401k RMDs can be avoided by rolling the account into a Roth IRA before RMD age. Roth IRAs don't have RMDs during your lifetime, giving you more control over withdrawals.
🗺️ State Tax Considerations
Some states don't tax retirement income at all, while others do. If you plan to retire in a different state, research its tax treatment of 401k withdrawals.
Tax-Friendly Retirement States: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming have no state income tax. Moving to these states in retirement can save thousands annually on 401k withdrawals.
💡 Tax Planning Tip: Consider working with a tax professional or financial advisor to optimize your 401k strategy based on your current tax bracket, expected retirement tax bracket, and retirement timeline. The right mix of Traditional and Roth contributions can significantly reduce your lifetime tax burden.
2024 IRS Contribution Limits
Employee Contribution
$23,000
Your maximum contribution (excluding catch-up)
Catch-Up Contribution
+$7,500
Additional amount if you're 50 or older
Total Limit
$69,000
Combined employee + employer contributions
⚠️ Important: These limits are for 2024 and are adjusted annually for inflation. Always check the current year's limits with your plan administrator or the IRS website.
Frequently Asked Questions
What is a 401k retirement plan?
A 401k is an employer-sponsored retirement savings plan that allows you to contribute a portion of your salary on a tax-advantaged basis. Contributions are typically invested in mutual funds, stocks, bonds, or other securities, and grow tax-deferred until withdrawal in retirement. Many employers offer matching contributions, essentially giving you free money toward your retirement.
How does employer matching work?
Employer matching means your company contributes additional money to your 401k based on your contributions. For example, a "50% match up to 6% of salary" means: if you contribute 6% of your $60,000 salary ($3,600), your employer adds 50% of that ($1,800). You should always contribute at least enough to get the full match - it's free money with an instant 50% return!
What's a good rate of return to expect?
Historical data shows the S&P 500 has averaged about 10% annual returns over the long term. However, 401k calculators typically use more conservative estimates of 6-8% to account for market volatility, fees, and more conservative asset allocations (especially as you near retirement). Young investors with aggressive portfolios might see 8-10%, while conservative portfolios closer to retirement might target 4-6%.
How much should I contribute to my 401k?
Financial advisors typically recommend saving 15-20% of your gross income for retirement, including any employer match. At minimum, contribute enough to get the full employer match. If you're starting late or have aggressive retirement goals, you may need to save more. Use this calculator to determine how much you need to contribute to reach your retirement goals.
Can I withdraw money from my 401k before retirement?
Yes, but with significant penalties. If you withdraw before age 59½, you'll typically pay a 10% early withdrawal penalty plus ordinary income taxes on the amount withdrawn. Some exceptions exist for hardships (medical expenses, first-time home purchase, etc.). Many plans also allow 401k loans where you borrow from yourself and pay yourself back with interest - but this should be a last resort.
What is the 4% rule for retirement withdrawals?
The 4% rule is a guideline suggesting you can safely withdraw 4% of your retirement portfolio in the first year of retirement, then adjust that amount for inflation each year, with a low risk of running out of money over a 30-year retirement. For example, a $1 million portfolio would provide about $40,000 per year ($3,333 per month) in retirement income. This calculator uses the 4% rule to estimate your monthly retirement income.
Should I choose Traditional or Roth 401k?
It depends on whether you expect to be in a higher or lower tax bracket in retirement. Traditional 401k contributions reduce your taxable income now (good if you're in a high bracket), but withdrawals are taxed in retirement. Roth contributions are made with after-tax dollars, but all withdrawals including growth are tax-free in retirement. Many people choose a mix of both for tax diversification. Younger workers often benefit more from Roth, while high earners benefit more from Traditional.
What happens to my 401k if I change jobs?
You have several options: (1) Leave it in your old employer's plan (if allowed), (2) Roll it over to your new employer's 401k plan, (3) Roll it over to an Individual Retirement Account (IRA), or (4) Cash it out (not recommended due to taxes and penalties). Rolling over to an IRA or new employer's plan is usually the best choice as it maintains the tax-advantaged status and keeps your retirement savings on track.
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