About the 401(k) Calculator
A 401(k) lets you invest part of each paycheck for retirement, and many employers add a match — for example 50% of what you contribute, up to 6% of your salary. Over decades, contributions plus compounding can add up to a large share of your retirement savings.
The projection uses the IRS elective-deferral limit (and age-based catch-up) from the latest year in the centralized data. It is an estimate, not a guarantee of future balances.
How It Works
Each year, your contribution is your salary times your contribution percentage, capped at the IRS employee limit for your age. Your employer adds its match percentage on the part of your contribution up to the match limit.
Contributions are added monthly and grow at the monthly equivalent of your expected annual return. If you enter a salary increase, contributions rise each year along with your pay.
Formula
Example
A 30-year-old earns $75,000, has $20,000 in a 401(k), contributes 6%, and gets a 50% match up to 6% of salary. They assume a 7% return until age 65.
Inputs
- Your contribution
- 6% ($4,500/yr)
- Employer match
- $2,250/yr
- Return
- 7.00%
- Years
- 35
Results
- Estimated balance
- $1,176,201.80
- Your contributions
- $157,500.00
- Employer contributions
- $78,750.00
Investment growth makes up most of the projected balance in this example. Real returns will vary year to year.
Assumptions & Limitations
- IRS limits (employee deferral and catch-up at ages 50+ and 60–63) come from the latest year in the centralized data and are held constant for future years; the IRS adjusts them annually.
- Constant return each year; actual market returns vary and can be negative.
- Not included: fees, vesting schedules, the overall annual additions limit, taxes on withdrawals, and inflation. Results are in future dollars.
- Match formulas differ by plan (e.g. dollar-for-dollar on the first 3%, then 50% on the next 2%). Enter the combination that best approximates yours.
Understanding Your Results
- Estimated Retirement Balance: Projected account value at your retirement age.
- Employer Contributions: Total matching money from your employer over the period.
- Investment Growth: Estimated earnings on your balance and contributions.