Free 401(k) Calculator

This 401(k) calculator projects how your retirement account will grow over time based on your salary, contribution rate, employer matching, expected investment returns, and anticipated salary increases. It breaks down your final balance into three components: your contributions, your employer's matching contributions, and investment growth from compound returns. Here is how to get the most accurate projection.

1. Enter your age information. Input your current age and the age you plan to retire. The difference between these determines how many years your 401(k) has to grow. Even a few extra years makes a significant difference due to compound growth.
2. Enter your current 401(k) balance. This is the current value of your 401(k) account. If you are just starting out, enter $0. If you have rolled over previous 401(k)s into this account, include the total balance.
3. Enter your annual salary. This is your gross salary before taxes and deductions. Your 401(k) contribution and employer match are calculated as a percentage of this amount.
4. Set your contribution percentage. This is the percentage of your salary that you contribute to your 401(k) each year. For example, if you earn $75,000 and contribute 10%, you contribute $7,500 per year. The calculator caps contributions at the annual IRS limit ($23,000 in 2024, or $30,500 if you are 50 or older).
5. Enter your employer match details. Most employers match a percentage of your contribution up to a limit. For example, a "50% match up to 6%" means your employer contributes 50 cents for every dollar you contribute, but only on the first 6% of your salary. Enter the match rate and the salary limit separately.
6. Set growth assumptions. Enter your expected annual salary increase (3% is typical) and expected investment return (7% is a common long-term stock market estimate). These assumptions significantly impact the final projection.
7. Review your results. The dashboard shows your projected balance at retirement, total free money from your employer, estimated tax savings this year, and your projected monthly retirement income based on the 4% withdrawal rule. The stacked chart shows how each component contributes to your total.

A 401(k) plan is one of the most powerful wealth-building tools available to American workers. Named after Section 401(k) of the Internal Revenue Code, this employer-sponsored retirement plan offers significant tax advantages that can help you accumulate hundreds of thousands or even millions of dollars for retirement.

How Pre-Tax Contributions Work

When you contribute to a Traditional 401(k), your contributions are deducted from your paycheck before income taxes are calculated. This means every dollar you contribute reduces your taxable income by a dollar. If you are in the 24% federal tax bracket and contribute $10,000 to your 401(k), you save $2,400 in federal income taxes that year. You might also save on state income taxes depending on where you live. The net cost of that $10,000 contribution is only $7,600 out of your take-home pay. This tax break effectively gives you an immediate return on your money before any investment growth occurs.

Tax-Deferred Growth

Inside your 401(k), your investments grow tax-deferred, meaning you do not pay taxes on dividends, interest, or capital gains each year. In a regular taxable brokerage account, you owe taxes on dividends annually and capital gains when you sell — this annual tax drag can reduce your effective return by 1-2% per year. Over decades, the difference is substantial. For example, $100,000 invested for 30 years at 7% in a taxable account (with an effective 1.5% annual tax drag from a 5.5% after-tax return) would grow to approximately $498,395. The same amount in a tax-deferred 401(k) at the full 7% would grow to $761,226 — a difference of $262,831. Even after paying income taxes on the 401(k) withdrawal, you are likely ahead due to decades of uninterrupted compounding.

How Withdrawals Work in Retirement

When you withdraw money from a Traditional 401(k) in retirement (after age 59.5), you pay ordinary income taxes on the entire amount — both your original contributions and the investment growth. However, most retirees are in a lower tax bracket than during their peak earning years, so the effective tax rate on withdrawals is often lower than the tax savings they received on contributions. Starting at age 73 (as of 2023 rules), you must take Required Minimum Distributions (RMDs) each year, which means you cannot defer taxes indefinitely. RMDs are calculated based on your account balance and life expectancy and typically require you to withdraw 3-5% per year.

The employer match is often called "free money" because it is exactly that: your employer contributes additional dollars to your retirement account simply because you participate. Not contributing enough to capture the full match is the single biggest mistake employees make with their 401(k).

How Matching Works

Employer matching formulas vary, but some of the most common structures include: a 100% match on contributions up to 3% of salary (dollar-for-dollar on your first 3%), a 50% match on contributions up to 6% of salary (50 cents per dollar on your first 6%), and a tiered match such as 100% on the first 3% plus 50% on the next 2%. Understanding your specific match formula is critical. For example, with a "50% match up to 6%" formula and a $75,000 salary, you need to contribute at least 6% ($4,500) to get the full match. Your employer would contribute $2,250. If you only contribute 3% ($2,250), your employer only matches $1,125 — you are leaving $1,125 in free money on the table.

Vesting Schedules

While your own contributions are always 100% yours, employer matching contributions often come with a vesting schedule. Vesting determines how much of the employer match you get to keep if you leave the company. Common vesting schedules include immediate vesting (you own the match right away), cliff vesting (0% until a set number of years, then 100%), and graded vesting (gradually increasing ownership, such as 20% per year over five years). If your employer uses a three-year cliff vesting schedule and you leave after two years, you forfeit the entire employer match. Understanding your vesting schedule is important when considering job changes.

The True Cost of Not Maximizing Your Match

Consider a worker earning $75,000 with a 50% match up to 6%. The maximum annual match is $2,250. Over a 35-year career at 7% annual returns, that annual $2,250 in employer matching contributions would grow to approximately $347,000. That is $347,000 in wealth from money that your employer was willing to give you for free. Failing to contribute enough to capture the full match is equivalent to declining $2,250 of your compensation every year. There is virtually no scenario where it makes financial sense to leave employer match money on the table.

The IRS sets annual limits on how much you can contribute to your 401(k). Understanding these limits helps you maximize your tax-advantaged savings.

2024 and 2025 Contribution Limits

For 2024, the employee contribution limit is $23,000 for workers under age 50. Workers aged 50 and older can make an additional catch-up contribution of $7,500, bringing their total limit to $30,500. The total contribution limit including employer contributions is $69,000 ($76,500 with catch-up). These limits are adjusted annually for inflation. The IRS typically announces the following year's limits in October or November.

Catch-Up Contributions for Workers 50 and Older

The catch-up contribution provision exists specifically to help older workers who may have started saving late or need to accelerate their savings as retirement approaches. The extra $7,500 per year may not sound like much, but over 15 years (age 50 to 65) at 7% returns, catch-up contributions alone would grow to approximately $188,000. If you are 50 or older, take advantage of this provision. You can also make catch-up contributions to IRAs (an additional $1,000 per year beyond the standard $7,000 limit).

Roth 401(k) Option

Many employers now offer a Roth 401(k) option alongside the Traditional 401(k). With a Roth 401(k), you contribute after-tax dollars (no tax deduction today), but all qualified withdrawals in retirement are completely tax-free — including all the investment growth. The contribution limits are the same as the Traditional 401(k). You can split your contributions between Traditional and Roth if your plan allows it. The Roth option is particularly valuable for younger workers who are likely in a lower tax bracket now than they will be in retirement. Keep in mind that employer matching contributions always go into the Traditional (pre-tax) side, even if your employee contributions are Roth.

Choose Low-Cost Index Funds When Available

If your 401(k) offers index funds, choose them over actively managed funds whenever possible. Index funds typically have expense ratios of 0.03-0.15%, while actively managed funds often charge 0.50-1.50%. Over 30 years on a $500,000 portfolio, the difference between a 0.05% and a 1.0% expense ratio is approximately $130,000 in lost growth. Research consistently shows that the vast majority of actively managed funds underperform their benchmark index over long periods. Look for funds that track the S&P 500, total U.S. stock market, total international stock market, or total bond market.

Use Target-Date Funds for Simplicity

If you do not want to manage your own asset allocation, a target-date fund is an excellent hands-off option. Choose the fund with the year closest to your expected retirement date. These funds automatically hold a diversified mix of stocks and bonds and gradually become more conservative as you approach retirement. The slight premium in expense ratio (typically 0.10-0.20%) is worth the built-in diversification and automatic rebalancing for most investors.

Increase Contributions with Every Raise

One of the most effective strategies for growing your 401(k) is to increase your contribution rate by 1-2% every time you get a raise. This way, you never feel the increase because your take-home pay stays the same or even grows slightly. Starting at a 6% contribution rate and increasing by 1% per year, you would reach 15% in nine years without ever reducing your take-home pay. Many 401(k) plans offer automatic escalation features that do this for you.

Do Not Cash Out When Changing Jobs

When you leave a job, the temptation to cash out your 401(k) can be strong, especially if the balance is small. Resist this temptation. Cashing out a $20,000 401(k) at age 30 (in the 24% tax bracket with a 10% penalty) would net you only about $13,200 after taxes and penalties. But if left invested at 7% until age 65, that $20,000 would grow to approximately $213,000. Always roll your old 401(k) into your new employer's plan or into an IRA.

Review Your Plan Annually

Check your 401(k) at least once a year to review your contribution rate, investment allocation, and overall performance. Make sure you are still contributing enough to capture the full employer match. Verify that your asset allocation still matches your risk tolerance and time horizon. As you approach retirement, gradually shift toward more conservative investments to protect against a market downturn in the critical years before and after you stop working.