How to use the 401(k) Calculator
- Enter your annual salary and the percentage of it that you contribute.
- Enter the employer match as a percentage of your salary. Check your plan documents for the exact rule.
- Enter your expected yearly raise and expected investment return.
- Enter your current balance, your age today and the age at which you plan to retire.
- Read the estimated balance and the split between your contributions, your employer’s and growth.
Formula used
Each year: balance = balance × (1 + return) + your contribution + employer match, where contributions are a percentage of that year’s salary. Salary then rises by the yearly growth rate.
Worked example
Here is the 401(k) Calculator worked through with the example values shown above, so you can check each step by hand.
| Inputs | |
|---|---|
| Annual salary | $70,000 |
| Your contribution | 6 % of salary |
| Employer match | 3 % of salary |
| Yearly salary growth | 3 % |
| Expected return (per year) | 7 % |
| Current balance | $10,000 |
| Your age today | 30 |
| Retirement age | 65 |
| Result | |
| Estimated balance at retirement | $1,345,144 |
| Your contributions | $253,941 |
| Employer contributions | $126,970 |
| Investment growth | $954,233 |
Balance at different contribution rates
The default profile, with only your contribution percentage changed.
| Your contribution | Estimated balance at retirement | Your contributions |
|---|---|---|
| 3 % of salary | $932,351 | $126,970 |
| 6 % of salary | $1,345,144 | $253,941 |
| 10 % of salary | $1,895,534 | $423,235 |
| 15 % of salary | $2,583,522 | $634,852 |
| 20 % of salary | $3,271,510 | $846,469 |
How the projection works
Each year the balance grows by the expected return, then your contribution and the employer match for that year are added. Your salary rises by the expected yearly raise, so contributions grow too. For a $70,000 salary, a 6% contribution, a 3% match, 3% raises, a 7% return and a $10,000 starting balance over 35 years, the estimate is $1,345,144.
Of that, you contribute $253,941, your employer adds $126,970 and investment growth supplies about $954,233. Growth is the largest part, which is why starting early matters so much. The result is in future dollars and is not adjusted for inflation.
The value of starting early
The same plan with retirement at 55 instead of 65 would have 25 years to grow, and the estimate falls to $579,325. Starting ten years later, at age 40 with the same retirement age of 65, gives $579,325. Time affects the result more than most people expect, because the money added early compounds for the longest.
Contribution rate also matters. Contributing 3% gives $932,351, 10% gives $1,895,534, 15% gives $2,583,522 and 20% gives $3,271,510, with the other numbers unchanged.
Make the most of the employer match
If your employer matches part of your contribution, it is effectively extra pay. Without the match the default case ends at $932,351, so a 3% match adds $412,793. Contribute at least enough to receive the full match, if you can, before putting money elsewhere.
Match formulas differ: some employers match dollar for dollar up to a limit, others match half. Some require you to stay for a period before the match is yours, which is called vesting. Check your plan documents for the exact rules.
Return, risk and fees
The expected return is an assumption, not a promise. Stock-heavy portfolios have historically earned more than bonds over long periods, but with large swings, and returns can be lower than expected for years. Try a lower rate, such as 5%, to see a more cautious case. Fees in the plan or funds reduce your return, so look at the expense ratios of your investments.
Government rules on contribution limits, taxes on withdrawals and required distributions change over time. Check the current rules with your plan administrator or the tax authority. Traditional and Roth accounts are taxed differently, and this calculator does not model taxes.
Frequently asked questions
How much should I contribute to my 401(k)?
A common guide is to contribute at least enough to get the full employer match and to work towards 10% to 15% of salary, including the match. Your own needs may differ.
Are there limits on 401(k) contributions?
Yes. The government sets yearly limits and they change over time. Check the current limit with the IRS or your plan.
Is the result adjusted for inflation?
No. The result is in future money. Use the inflation calculator on this site to see what it is worth in today’s terms.
What return should I assume?
It depends on how your money is invested. Many planners use 5% to 7% for a diversified long-term portfolio, but returns are not guaranteed. Test a few values.
Does this include taxes?
No. Traditional 401(k) withdrawals are usually taxed as income, and Roth withdrawals follow different rules. Plan for taxes separately.
What is vesting?
The period before employer contributions fully belong to you. If you leave before you are vested, you may lose part of the match.
This calculator gives estimates for information only. Actual figures from a bank, employer, tax authority or doctor may differ. It is not financial, tax, legal or medical advice.