How the 401(k) calculator works
Each month, your contribution (a percentage of salary) and your employer's match are added to the balance, and the whole balance grows at your expected return. Your salary rises once a year by the increase you set, so contributions grow too.
balance = balance × (1 + return ÷ 12) + monthly deposit
The result is shown in future dollars and in today's dollars, after inflation, so you can judge what it will buy.
Example
A 30-year-old earning $75,000 who contributes 6% with a 50% match up to 6% puts in $4,500 a year, and the employer adds $2,250. With a $20,000 starting balance, 3% raises and a 6% return, the calculator projects the balance at 67 above.
Next steps
- See whether your total savings will last with the retirement calculator.
- Find your exact retirement date and countdown on the retirement date tab.
Frequently asked questions
How does a 401(k) employer match work?
A common match is 50% of what you contribute, up to 6% of your salary. If you earn $75,000 and contribute 6% ($4,500), your employer adds $2,250. Contributing less than the match limit leaves free money on the table.
How much should I contribute to my 401(k)?
At minimum, contribute enough to get the full employer match. Many planners suggest saving 10 to 15 percent of income for retirement in total, including the match.
Is there a limit on 401(k) contributions?
Yes. The IRS sets a yearly limit on employee contributions, with a higher catch-up amount for people 50 and over. This calculator does not cap contributions, so check the current limits on irs.gov if you contribute a large share of a high salary.
What return should I use?
Long-term projections often use 5 to 7 percent a year for a diversified portfolio. Real returns vary from year to year and are not guaranteed, so try a few different rates.
Is this financial advice?
No. It is an educational estimate that ignores taxes, fees and market swings. A qualified financial adviser can help with decisions about your plan.