Your 401(k) is one of the most powerful wealth-building tools available. With pre-tax contributions, employer matching (free money), and compound growth, it can grow significantly over decades. This calculator projects your retirement balance factoring in your contributions, your employer's match, and expected annual returns.
Retirement Balance:
Total Interest Earned:
Enter values and click Calculate to see chart
How to Use This Tool
Enter your current age and planned retirement age.
Enter your current 401(k) balance.
Enter how much you contribute monthly.
Enter your employer's match percentage (e.g., 50% match up to 6% of salary).
Enter your annual salary.
Enter your expected annual return (historically 7-8% for diversified portfolios).
Click Calculate to see your projected retirement balance.
The Formula
Uses future value of lump sum + future value of annuity: FV = CurrentBalance x (1+r)^n + MonthlyContrib x [(1+r)^n - 1] / r where r is monthly return rate and n is total months until retirement.
Why It Matters
You are 30 with $25,000 in your 401(k), earning $75,000/year, contributing $500/month with a 50% employer match up to 6%. At 7% annual return, your balance at 65 could reach $1,118,000 — including $28,125 in free employer money every month. Not contributing the full match leaves $14,063 on the table.
Frequently Asked Questions
What is a 401(k)?
A 401(k) is an employer-sponsored retirement savings plan that allows you to contribute pre-tax dollars from your paycheck, reducing your current taxable income. For 2024, you can contribute up to $23,000 ($30,500 if age 50 or older with catch-up contributions). Many employers offer matching contributions, which is essentially free money added to your account. Your investments grow tax-deferred until withdrawal in retirement, when distributions are taxed as ordinary income.
What is the difference between traditional and Roth 401(k)?
Traditional 401(k) contributions reduce your current taxable income because they are made with pre-tax dollars, and you pay taxes on withdrawals in retirement. Roth 401(k) contributions are made with after-tax dollars, so you get no current tax break, but qualified withdrawals in retirement are tax-free. If you expect to be in a higher tax bracket in retirement, Roth is generally preferable. Many employers offer both options, allowing you to diversify your tax exposure.
When should I start contributing to my 401(k)?
Start contributing as soon as you begin working at an employer that offers a 401(k), and contribute at least enough to get the full employer match. Even small contributions in your 20s compound dramatically over decades — $200/month starting at age 25 with 7% returns grows to over $500,000 by age 65. If you are behind, increase contributions gradually each raise or bump up your deferral by 1% each year. The earlier you start, the less you need to contribute each month.
What is employer matching and how does it work?
Employer matching is a contribution your employer makes to your 401(k) based on your own contributions, typically expressed as a percentage match up to a cap. A common formula is 50% of your contributions up to 6% of your salary, meaning if you earn $60,000 and contribute 6% ($3,600/year), your employer adds $1,800. This is an instant 100% return on your contribution up to the match limit, which is why skipping the match is equivalent to turning down part of your salary.
Can I withdraw from my 401(k) before retirement?
Withdrawals before age 59½ generally incur a 10% early withdrawal penalty plus ordinary income taxes on the distribution. Hardship withdrawals are allowed for specific circumstances like medical emergencies, preventing foreclosure, or funeral expenses, but you still pay taxes and penalties. Some plans offer 401(k) loans that let you borrow up to $50,000 or 50% of your vested balance, repaid through payroll deductions. Consider a Roth conversion or in-service distribution from a Roth 401(k) as penalty-free alternatives for qualified Roth contributions.