401(k) Calculator

What Is a 401(k)?

The name is a section number. Internal Revenue Code section 401(k) is the paragraph that lets an employee route part of their pay into a plan account instead of taking it as cash, and that paragraph has become the main place American retirement saving happens.

How the Account Actually Works

Money moves by payroll deduction, so it never passes through your checking account. A traditional deferral comes out before federal income tax, lowering your taxable income for the year; a Roth deferral comes out after tax, and qualified withdrawals later are tax-free. Either way, dividends and capital gains inside the account are untaxed as they occur, which is the structural advantage over saving the same money in a brokerage account.

The employer picks the plan's investment menu — usually a short list of mutual funds plus target-date funds — and you pick from it. Your balance at any moment is contributions plus market performance minus fund expenses. There is no interest rate anywhere in a 401(k), which is why this calculator asks you to supply an assumed return rather than offering one.

Two things separate it from a savings account. The money is invested, so it can fall as well as rise. And it is locked: reaching it before age 59½ generally means ordinary income tax on the withdrawal plus an additional 10% early-distribution tax, unless a specific exception applies.

The Employer Match Is the Distinguishing Feature

A match is compensation your employer will pay only if you contribute first. It is written as a rate and a cap. "50% up to 6%" means the employer adds 50 cents for every dollar you defer, on the first 6% of your salary and nothing above it. On an $80,000 salary, deferring 6% means you put in $4,800 and collect $2,400 — a 50% return on that money before a single day of investing.

That 50% is written into the plan document rather than earned in a market, so it is credited whichever way the funds move that year, and it changes only if the employer rewrites the formula. What it will not do is arrive on its own: no deferral means no match, and a deferral under the cap collects only part of it, which is why this calculator's status line flags any contribution below that line.

Federal employees have their own version, with a fixed agency formula instead of an employer's — the TSP Calculator.

401(k), IRA, and a Plain Brokerage Account

The three differ on who runs the account, whether anyone adds money, and how much you may put in. A 401(k) is run by your employer, may carry a match, and carries the higher annual employee contribution limit of the two tax-sheltered accounts. An IRA is opened by you at any broker, has a much lower limit and no match, but a wider investment menu. A taxable brokerage account is capped by nothing but your bank balance, has no match and no tax shelter — gains are taxed as they are realized.

The conventional funding order follows the match: contribute enough to the 401(k) to collect it, because that is a guaranteed return the other two accounts cannot match; then use an IRA for its wider menu and lower fees; then come back to the 401(k) for anything left. The order changes if your plan's funds are unusually expensive, which is a fee question, not a tax question.

For the after-tax side of that order, and how a tax-free withdrawal changes the arithmetic, use the Roth IRA Calculator.

How Do You Calculate 401(k) Growth?

Two deposit streams and an opening balance, compounded monthly. The arithmetic is the future value of a lump sum plus the future value of an annuity — the same math a compound-interest calculator runs, with the employer's money folded into the monthly deposit.

The 401(k) Formula, Written Out

Three preparatory lines, then one equation:

Your contribution = salary × your %
Employer match    = salary × min(your %, cap %) × match rate
Monthly deposit   = (your contribution + match) ÷ 12

Balance = C × (1 + r)ⁿ  +  PMT × [ (1 + r)ⁿ − 1 ] ÷ r

C   = current balance
PMT = monthly deposit
r   = assumed annual return ÷ 12, as a decimal   (7% → 7 ÷ 1200 = 0.00583333)
n   = months until retirement                    (30 years → 360)

The min() in line two is the entire match rule. Whichever is smaller — your percent or the cap — is the slice of salary the match applies to, so raising your contribution above the cap changes your own deposit and leaves the employer's untouched. The second term of the balance equation is the future value of an ordinary annuity, a finite geometric series with ratio (1 + r), which is why 360 separate deposits collapse into one compact fraction. "Ordinary" means each deposit lands at the end of its month, so the first $600 earns 359 months of growth rather than 360.

If the assumed return is 0%, the fraction would divide by zero, so the tool substitutes:

Balance = C + (PMT × n)

What the equation does not contain is as important as what it does. There is no salary growth term, no IRS contribution limit, no fee drag, no tax, and no vesting. Each of those is a real difference between this number and your account, and each is covered under Limits below.

Step by Step

Working the default run by hand — $80,000 salary, 6% contribution, a 50%-up-to-6% match, $10,000 already in the account, 7% assumed, 30 years to go:

• Your contribution: $80,000 × 6% = $4,800 a year.
• Matched percent: the lesser of your 6% and the plan's 6% cap, so 6%.
• Employer match: $80,000 × 6% × 50% = $2,400 a year.
• Monthly deposit: ($4,800 + $2,400) ÷ 12 = $600.
• Monthly rate: 7 ÷ 1200 = 0.00583333. Months: 30 × 12 = 360.
• Growth factor: 1.00583333 raised to the 360th power = 8.116497.
• Grow the opening balance: $10,000 × 8.116497 = $81,165.
• Grow the deposits: $600 × (8.116497 − 1) ÷ 0.00583333 = $600 × 1,219.971 = $731,983.
• Add the two halves: $81,165 + $731,983 = $813,148.

The exponent has to be applied before anything is multiplied, and the rounding belongs at the very end — carrying the growth factor to three decimals instead of six lands hundreds of dollars off. Step 2 is where most hand calculations go wrong: it is a minimum, not your contribution percent, and once you are at or above the cap it stops moving.

Worked Example: $80,000 Salary, 6% Contribution, 30 Years

The balance field arrives pre-filled at $10,000, so this run needs six numbers typed in:

Inputs: $80,000 salary · 6% contribution · 50% match up to 6% · $10,000 balance · 7%/yr · 30 years

$813,148 projected — $154,000 yours + $72,000 match + $587,148 growth

Read the decomposition carefully, because one line is not what it looks like. The $154,000 is thirty years of $4,800 deposits — $144,000 — plus the $10,000 you started with. The $72,000 is thirty years of $2,400 match. Together, $226,000 of actual money went in, and that is exactly what the tool returns if you set the assumed return to 0%. The remaining $587,148, or 72.2% of the ending balance, was added by compounding rather than by anyone.

The match's real weight is larger than its $72,000 line suggests. Rerun the identical inputs with the match rate set to 0 and the projection falls to $569,153. The gap — $243,994, or 30.0% of the total — is the match plus thirty years of growth on it. Set the two grown figures side by side, since that is the only fair comparison: your money is $569,153, or 70.0% of the ending balance, against the employer's 30.0%, so yours is 2.33 times theirs. The $600 monthly deposit splits $400 to $200, which on its own would make the ratio 2; the $10,000 head start, yours alone, lifts it to 2.33. The point is not that either side wins — it is that $72,000 of someone else's money became three tenths of the result, compounded on identical terms to your own.

How Much Is the Employer Match Worth?

The match is the reason a 401(k) beats every other account for the first few percent of pay, and this calculator can isolate its value exactly. Run your real inputs, note the number, then set the match rate to 0 and run again. The difference is what the match is worth to you, growth included.

What Common Match Formulas Are Worth

Every row below uses an $80,000 salary, a $10,000 opening balance, 7% assumed and 30 years. In each matched plan the employee contributes exactly to that plan's cap; the final row is the unmatched baseline the others are measured against, so it holds the deferral at 6% with nothing added to it. The last column is the projection minus the same run with the match rate zeroed:

The engine underneath all of this is ordinary monthly compounding, which you can run on any deposit with the Compound Interest Calculator.

Compare the two rows that both pay $2,400 a year. A 50%-up-to-6% plan and a 100%-up-to-3% plan hand over identical employer money and identical 30-year match value, yet the projected balances differ by $243,994 — entirely because the first plan requires 6% of your pay to collect it and the second only 3%, a $200-a-month difference in your own deposit. Then look at the bottom half: a 50%-up-to-4% plan at 4% and no match at all at 6% both land on exactly $569,153. The match in that plan is doing the work of two extra points of your salary.

Contributing Below the Cap, in Dollars

Same $80,000 salary and the same 50%-up-to-6% plan, moving only the contribution percent. The tool prints a warning on any row above the line, because the shortfall is employer money rather than your own:

Moving from 3% to 6% costs $2,400 a year of pre-tax pay — $200 a month, or roughly $156 of take-home at a 22% marginal rate if the deferral is traditional — and adds $365,991 to the projection, a third of which is employer money rather than your own. Above the cap the match column stops moving: the last three rows all read $2,400, and every additional dollar there is unmatched. That does not make it a bad idea, only a different one, competing on equal terms with an IRA or a taxable account rather than on a guaranteed 50%.

One more consequence of that flat match column: 10% is not "twice as good" as 5%. It is worth $447,323 more on this run. Only $40,666 of that is employer money — 5% sits below the 6% cap, so raising your rate to 10% also lifts the match from $2,000 to $2,400 a year. The other $406,657 is your own.

Tiered Matches, and How to Enter Them

Plenty of plans use a two-tier formula rather than a single rate. The statutory safe-harbor version, set out in Internal Revenue Code section 401(k)(12)(B), matches 100% of elective contributions up to 3% of compensation plus 50% of contributions between 3% and 5% — a total of 4% of salary for an employee deferring 5% or more. This calculator takes one rate and one cap, so a tiered plan needs a translation before you can use it.

The method: work out what the match actually pays as a percent of salary at your own deferral, then pick a rate and cap whose product equals it. For the basic safe-harbor formula, that is a rate of 80 with a cap of 5, because 5% × 80% = 4% of salary. On $80,000 the calculator then reports $3,200 a year of match — which is what the tiered formula genuinely pays — and a 30-year projection of $894,479 at a 6% deferral.

The proxy is exact at deferrals of 5% or more and slightly conservative below it: a 4% deferral really earns 3.5% of salary under the tiered rule, while a rate of 80 with a cap of 5 shows 3.2%. Build the proxy at the deferral you actually use, not at a round number.

Using This 401(k) Calculator Online

Seven fields. Four of them come straight off a pay stub or your plan's Summary Plan Description, one off your latest account statement, and the last two — the assumed return and the years left before you retire — are yours to choose. It is free to use and needs no account: fill the fields, press Calculate, and the result panel fills in.

The Seven Inputs

• Annual Salary — gross pay before deductions, because contribution percentages are applied to gross. Accepts $10,000 to $2,000,000.
• Your Contribution — the percent of pay you defer each period, 1 to 90. This is the number payroll holds, not a dollar amount.
• Employer Match Rate — cents on the dollar, written as a percent. A 50-cent match is 50; dollar-for-dollar is 100. Enter 0 if there is no match.
• Match Cap (% of salary) — the share of pay the match applies to. In a 50%-up-to-6% plan this is 6.
• Current Balance ($) — what the account already holds, pre-filled at $10,000. Type 0 if the account is new. The field strips currency symbols and commas, so "$10,000" is read correctly.
• Assumed Annual Return — your own assumption for the funds you hold, 0 to 30. The tool does not supply a figure and does not forecast one.
• Years Until Retirement — 1 to 50, in whole years.

If your plan has no match, set both match fields to 0. The rate is the field that pays: leave a cap behind with the rate at 0 and the match line reads $0 either way, but the status-line warning is triggered by your contribution percent sitting below the cap, not by the rate. So 3% against a stray 6% cap is warned about a match worth nothing, while 6% against that same stray cap prints the all-clear.

The Limits the Tool Enforces

An out-of-range entry returns an instruction instead of a number, so a blank result usually means one field is outside its band:

• Salary below $10,000 or above $2,000,000 → "Enter an annual salary".
• Contribution of 0, or above 90 → "Enter your contribution percent (1–90)".
• Assumed return below 0 or above 30 → "Enter an annual return between 0 and 30%".
• Years of 0, or above 50 → "Enter 1–50 years".

A blank Current Balance is read as zero rather than rejected. The default run drops from $813,148 to $731,983 when you clear it — the missing $81,165 is what a $10,000 head start becomes after 360 months at 7%. The match fields behave the same way: blank counts as zero, and neither has an upper gate.

What It Deliberately Leaves Out

No IRS contribution limit is applied. The tool will project 20% of a $400,000 salary without complaint, which no plan would actually permit, because the annual employee deferral cap is a dollar figure the IRS resets most years and a hardcoded number would be wrong within months of being typed. Check the current year's limit before trusting a high-percentage or high-salary run.

It also holds salary flat for the whole projection, which understates most careers, and it does not subtract fund fees or plan administration costs — those hide inside whatever return you assume, which flatters it. Vesting, taxes on withdrawal, job changes and loans are all absent. Each of these gets its own treatment further down.

Working from an hourly wage or a per-paycheck figure rather than an annual salary? Convert it first with the Salary Calculator.

How to Read Your Result

Four lines come back. The first is the projection; the three beneath it are the audit trail that lets you check whether the projection deserves the confidence you were about to give it.

Line by Line

• $813,148 projected — the account balance on your retirement date, in future dollars, before any tax is paid on a traditional balance.
• You: $4,800/yr (6%) + employer match: $2,400/yr — free money you can't get any other way — this year's two deposits, in the panel's own words. A $0 match line when you expected money means the rate or the cap field is wrong.
• Over 30 years: $154,000 yours + $72,000 match + $587,148 growth — the ending balance taken apart. "Yours" includes the opening balance, which is why it reads $154,000 rather than the $144,000 of deposits.
• The status line — either a warning that you are under the match cap, or confirmation that you are not, followed by the standing reminder that IRS annual limits apply and change.

The three figures in the third line add to the headline: $154,000 + $72,000 + $587,148 = $813,148. That is the fastest sanity check on any run you do, allowing a dollar either way, because each of the four figures is rounded to whole dollars on its own. If the growth term is small relative to the deposits, your horizon is short or your assumed return is low — both are legitimate, but they change what the number is good for.

The Total Is in Future Dollars

$813,148 arriving in thirty years is not $813,148 of today's purchasing power. At 3% inflation, the same basket of goods costs 2.427 times more after thirty years, which puts the projection at about $335,006 in today's money. The number did not shrink; the yardstick did.

This is not an argument against the projection. It is the reason to compare it against a retirement target expressed in the same future dollars, or to deflate it before deciding whether it feels like enough. Read against today's cost of living, a future balance misleads in both directions — reassuring at a large number, discouraging at a realistic one.

To convert any of these figures into today's purchasing power at a rate you choose, use the Inflation Calculator.

Judging Whether the Number Is Big Enough

A balance is not an income. The usual conversion is the 4% guideline: multiply the balance by 0.04 for a first-year withdrawal, then raise that dollar amount with inflation. $813,148 implies $32,526 in the first year, about $2,710 a month, before tax on a traditional balance.

Whether that is enough depends on Social Security, a spouse's account, whether the mortgage is finished, and how the balance is taxed — none of which this calculator can see. It also assumes the account stops growing the day you retire, which it does not; the withdrawal math simply starts from wherever the balance lands.

To turn the projected balance into a retirement income figure properly, including a target retirement age, use the Retirement Calculator.

401(k) Chart: What Each Input Changes

Each table holds the default run fixed — $80,000 salary, 6% contribution, 50% match up to 6%, $10,000 balance, 7% return, 30 years — and moves exactly one input. The point is not the individual numbers but the relative leverage of each field.

The Same Plan at Different Assumed Returns

Deposits are identical in every row: $226,000 of real money over the thirty years.

Two points of assumed return, 5% to 7%, is worth $269,115 on identical deposits — more than the $226,000 of money that actually goes in. That is the honest weakness of every projection built this way: the input you are least able to predict has the most leverage over the answer. Running the same plan at 5%, 7% and 9% and treating the spread as the real result is more useful than any single row.

The Same Plan Over Different Horizons

Money in is the opening $10,000 plus $7,200 a year of combined deposits:

Going from 35 to 40 years adds $542,308. Going from 5 to 10 adds $66,816. Identical five-year stretches, identical deposits, 8.12 times the effect. That multiple is not a ratio of balances — the balance at 35 years is 20.9 times the one at 5 — it is the thirty-year growth factor from step 6, 1.00583333³⁶⁰ = 8.116, because each five-year gain is proportional to (1 + r) raised to the months already elapsed and the later stretch has 360 more of them. Growth first overtakes the money you put in between years 15 and 20 — $100,667 against $118,000 at fifteen years, $198,943 against $154,000 at twenty — and from there the gap only widens.

The same lever works at the far end. Extending from 30 to 31 years moves the projection from $813,148 to $879,366, a gain of $66,218 in exchange for $7,200 of additional deposits. One extra year of work near retirement is worth more than the entire first five years of saving.

The Same 6% at Different Salaries

Contribution percent, match design, balance, return and horizon all held constant:

The balances are not proportional to salary, because the $10,000 opening balance is identical in every row and grows to $81,165 regardless of what anyone earns. Strip that constant out and the rest scales exactly with pay: $365,991 at $40,000 against $731,983 at $80,000, an exact doubling before either figure is rounded to the dollar. The practical reading is that a percentage-based contribution keeps pace with a raise automatically, while a fixed dollar contribution quietly falls behind one.

401(k) Examples

Three complete runs at different career stages, each with the figures the tool actually returns rather than a rounded illustration.

Early Career: $45,000 Salary, 4%, Dollar-for-Dollar to 3%

$1,800 a year of your money, $1,350 of the employer's. Note that the match stops at 3% of pay even though the deferral is 4%, so the fourth point goes in unmatched — the min() rule from the formula, visible in a real run. Total deposits over the forty years are $128,000 including the opening $2,000, and growth supplies 82.3% of the ending balance.

Inputs: $45,000 salary · 4% contribution · 100% match up to 3% · $2,000 balance · 7%/yr · 40 years

$721,636 projected — $74,000 yours + $54,000 match + $593,636 growth

Set the match rate to 0 and this run returns $426,345, so the employer's $54,000 is worth $295,292 by the end. On a modest salary with a long horizon, the horizon does most of the work: the growth factor over 480 months at 7% is 16.31, roughly double the 8.12 that thirty years produces.

Mid Career: $60,000 Salary, 5%, 100% to 4%, Starting From Zero

Nothing saved yet, and the run still clears $800,000, because a dollar-for-dollar match to 4% turns $250 a month of your money into $450 a month going into the account. That is the leverage the match provides, stated as a monthly deposit rather than a percentage.

Inputs: $60,000 salary · 5% contribution · 100% match up to 4% · $0 balance · 7%/yr · 35 years

$810,475 projected — $105,000 yours + $84,000 match + $621,475 growth

Zero the match rate and the same thirty-five years produce $450,264. The match is therefore worth $360,211 — 44.4% of the result — on a plan where the employee is contributing only 5% of pay. An account starting from nothing is not a lost cause; a match on an account starting from nothing is a considerable one.

Late Career: $120,000 Salary, 10%, 50% to 6%, With a Balance

A different shape entirely. Deposits dominate: $390,000 of your own money against $72,000 of match, with four points of the 10% deferral unmatched because the cap binds at 6%. Growth is 57.9% of the total here rather than the 72.2% of the default run, because twenty years at 6%, compounded monthly, gives a growth factor of 3.31 against the 8.12 of thirty years at 7%.

Inputs: $120,000 salary · 10% contribution · 50% match up to 6% · $150,000 balance · 6%/yr · 20 years

$1,097,184 projected — $390,000 yours + $72,000 match + $635,184 growth

A traditional balance of this size is eventually forced out by required distributions — size those withdrawals with the RMD Calculator.

Late starters buy the balance with contributions instead of time, which is why the 10% deferral in this run is not extravagant — it is what the arithmetic requires once the horizon is short. Zeroing the match gives $958,572, so even a capped match is still worth $138,612 across the twenty years.

Limits: When This Projection Does Not Apply

Every item below is a genuine difference between this arithmetic and your account. None of it is buried in a footnote, because a projection you cannot argue with is a projection you should not rely on.

It Does Not Enforce the IRS Contribution Limits

Two separate caps exist and the calculator applies neither. The first is the annual employee elective deferral limit — a dollar figure the IRS sets and adjusts most years, with an additional catch-up allowance from age 50 and a further one for ages 60 through 63 where the plan permits it. The second is an overall limit on everything credited to your account in a year: your deferrals, the employer match, and any profit-sharing contribution combined.

This bites at high salaries and high percentages. A 15% deferral on $150,000 is $22,500, which may sit above the current employee limit; the calculator will still project it. Look up the year's figures on the IRS page linked in the references rather than trusting a number typed into any web page, this one included.

The Match May Not Be Yours Yet

Your own deferrals are always 100% vested — the IRS states plainly that an employee's own contributions are owned by the employee from the start. Employer money is different. A plan may use cliff vesting, where nothing vests until a service threshold and then all of it does, or graded vesting, which phases ownership in year by year. The statutory maximum schedules are a three-year cliff (0%, 0%, then 100%) and six-year graded (0%, 20%, 40%, 60%, 80%, 100%).

Leave before the schedule completes and the unvested portion is forfeited, while the $72,000 of match in the default run quietly assumes you stay to the end. Safe-harbor employer contributions are the exception: the IRS requires them to be fully vested when made, which is part of what a plan buys by adopting the safe-harbor design.

Check the schedule in your Summary Plan Description before timing a resignation. On the default run the match compounds to $243,994 over thirty years, and the amount genuinely at risk on your last day is whatever your schedule has not yet vested — a number your benefits statement will show and this calculator cannot.

Flat Salary, Flat Return, Flat Contribution

All three are held constant for the entire projection. Real salaries rise, which raises both your deposit and the match, so the calculator understates most careers. Real returns arrive as a scatter rather than an average — a decade averaging 7% built from a −18% year and a +26% year does not produce the same balance as 7% every year, because the order in which returns arrive interacts with the timing of deposits. And most people change their contribution rate several times over a career.

Treat the output as the answer to "what if nothing changes", which is the only question a closed-form formula can answer. Rerun it when something does — a raise, a plan change, a new employer's match formula — rather than treating one run as a plan.

Fees and Taxes Are Not Subtracted

Fund expense ratios and plan administration costs come out of the return before any of it reaches you, and the calculator has no field for them. If you assume 7% and your funds cost 0.60% a year, the honest input is 6.4% — which turns $813,148 into $718,815 on the same deposits. That $94,332 is the thirty-year price of six-tenths of one percent, which is why the fee disclosure in your plan documents is worth the ten minutes.

Taxes are not modeled at all. A traditional 401(k) balance is taxed as ordinary income when it comes out, so $813,148 is a pre-tax figure; a Roth 401(k) balance of the same size is not taxed on qualified withdrawal. The calculator cannot distinguish them, because the growth arithmetic is identical — only the tax timing differs, and that difference is settled before the money goes in and after it comes out, never during.

To compare the same deposits without the plan wrapper, in an account with no match and no withdrawal rules, use the Investment Calculator.

One-Tier Matches Only

The match model is a single rate applied to a single cap. Tiered formulas need the translation described earlier, and it is only exact at or above the top tier. Per-pay-period matching without a year-end true-up can leave you short if you front-load contributions and hit the annual limit early, which nothing here models. Nonelective contributions — money the employer adds whether or not you contribute — cannot be entered at all, and neither can profit sharing.

Whatever proxy you build, check it against the match line the tool prints — if that dollar figure does not equal what your plan actually pays this year, the projection above it is wrong by the same proportion.

The Hard Edges

Set the return to 0 and the tool switches formulas rather than dividing by zero: the default run returns $226,000, which is exactly $154,000 of your money plus $72,000 of match with no growth term at all. Push salary outside $10,000 to $2,000,000, contribution outside 1 to 90, return outside 0 to 30, or years outside 1 to 50, and you get a one-line instruction instead of a figure.

None of that is a fault. They are the boundaries of a closed-form model, and a projection is only meaningful inside them — which is also why a 50-year run at 10% should be read as an illustration of compounding rather than as a forecast about your career.