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Calculate 401k returns with employer matching, contribution limits & tax benefits. Compare Traditional vs Roth 401k with yearly breakdown. Free & accurate!
Annual: $7.50K
50% match on first 6% of salary = $2.25K/year
Historical S&P 500 average: ~10%
A 401k Calculator is a comprehensive retirement planning tool that helps you project the future value of your 401k account based on your contributions, employer matching, expected returns, and time horizon. It shows you how much wealth you can accumulate through this powerful employer-sponsored retirement plan.
A 401k is an employer-sponsored retirement savings plan named after Section 401(k) of the Internal Revenue Code. It allows employees to save and invest a portion of their paycheck before taxes are taken out (Traditional 401k) or after taxes (Roth 401k). Many employers offer matching contributions, essentially giving you free money for your retirement.
Our advanced 401k calculator considers your current balance, annual salary, contribution percentage, employer match formula, expected investment returns, and salary growth to project your retirement savings. It provides year-by-year breakdown showing contributions, employer match, investment growth, and total balance, helping you make informed decisions about your retirement planning.
Accurately calculates employer matching contributions with customizable match formulas
Compare tax implications of Traditional and Roth 401k side-by-side
Detailed projection showing contributions, match, growth, and balance for each year
Factor in annual salary increases to see realistic contribution growth
Calculate tax benefits for Traditional 401k and after-tax value at retirement
Automatically shows current year limits including catch-up contributions for 50+
FV = PV × (1 + r)^n + PMT × [((1 + r)^n - 1) / r]
Example: $50,000 current + $625/month (10% of $75k salary) for 35 years at 8% return
401k Balance = $1.2+ million
Match = Salary × min(Your %, Match Limit) × Match %
Common Formula: 50% match on first 6% of salary
Example: $75,000 salary, you contribute 10%
• Your contribution: $75,000 × 10% = $7,500
• Matchable amount: $75,000 × 6% = $4,500
• Employer match: $4,500 × 50% = $2,250
• Total annual: $7,500 + $2,250 = $9,750
Tax Savings Now = Contribution × Current Tax Rate
Withdrawal Tax = Balance × Retirement Tax Rate
No immediate tax benefit
Qualified withdrawals are 100% tax-free
Best for:
High earners now, expect lower income in retirement
Best for:
Young professionals, expect higher income later
Many experts recommend splitting contributions between Traditional and Roth 401k for tax diversification. This gives you flexibility to manage taxes in retirement by choosing which account to withdraw from based on your tax situation each year.
Strategy: Maximize Roth 401k contributions, invest 90-100% in stocks
Contribution: At least get full employer match, aim for 10-15% of salary
Focus: Time is your biggest asset - compound growth over 30-40 years
Tip: Increase contribution by 1% annually with raises
Related: Compound Interest Calculator | Investment Calculator
Strategy: Max out contributions ($23,000 limit), balance Traditional/Roth
Contribution: 15-20% of salary, utilize catch-up contributions at 50+
Focus: Accelerate savings, gradually shift to 70-80% stocks
Tip: Review and rebalance portfolio annually
Related: Retirement Calculator | Savings Calculator
Strategy: Continue maxing out with catch-up ($30,500), shift to 50-60% stocks
Contribution: Don't stop contributing until retirement!
Focus: Capital preservation, plan withdrawal strategy
Tip: Consider Roth conversions before RMDs start at 73
Related: Social Security Calculator | Pension Calculator
* Employer match doesn't count toward employee limit but counts toward total limit
Leaving free money on the table! Always contribute at least enough to get full employer match. It's an instant 50-100% return on investment.
Taking cash withdrawal triggers taxes + 10% penalty. Always roll over to new 401k or IRA to maintain tax-advantaged growth.
Being too conservative in your 20s-40s limits growth. You need stocks for long-term growth. Bonds are for later years.
Early withdrawals cost you 10% penalty + taxes + lost compound growth. Use emergency fund instead. Your 401k is for retirement!
Keeping same contribution % as salary grows. Increase by 1-2% annually with raises to accelerate retirement savings.
High expense ratios (>1%) eat into returns. Choose low-cost index funds. A 1% fee difference can cost hundreds of thousands over 30 years.
A 401k is an employer-sponsored retirement savings plan that allows employees to contribute a portion of their salary on a pre-tax (Traditional) or after-tax (Roth) basis. The money grows tax-deferred, and many employers offer matching contributions. For 2024, the employee contribution limit is $23,000 ($30,500 if age 50+). You choose how to invest the money from options provided by your plan, typically including mutual funds, index funds, and target-date funds.
Traditional 401k: Contributions are pre-tax (reduce taxable income now), but withdrawals in retirement are taxed as ordinary income. Good if you expect to be in a lower tax bracket in retirement.
Roth 401k: Contributions are after-tax (no immediate tax benefit), but qualified withdrawals in retirement are completely tax-free. Good if you expect to be in a higher tax bracket in retirement or want tax-free income. Choose Traditional if you need the tax deduction now, Roth if you want tax-free growth and withdrawals.
At minimum, contribute enough to get the full employer match (typically 3-6% of salary). Ideally, aim for 10-15% of your salary, or more if you can afford it. For 2024, the maximum employee contribution is $23,000 ($30,500 if 50+). A good strategy is to start with the employer match, then increase by 1-2% annually with salary raises. If you're behind on retirement savings, consider maxing out your contributions.
Employer matching is when your company contributes to your 401k based on your contributions. Common formula: 50% match on first 6% of salary. Example: If you earn $75,000 and contribute 6% ($4,500), employer adds $2,250 (50% of $4,500). This represents additional compensation from your employer. Always contribute at least enough to get the full match - it's essentially part of your compensation package. Some companies offer dollar-for-dollar matching (100%), while others offer partial matching (25-50%).
For 2024, the 401k employee contribution limit is $23,000 for those under 50. If you're 50 or older, you can make catch-up contributions of an additional $7,500, bringing the total to $30,500. This limit applies to employee contributions only; employer matches don't count toward this limit. However, there's a combined limit of $69,000 ($76,500 with catch-up) for total contributions including employer match and profit-sharing.
Yes, but with penalties. Withdrawals before age 59½ typically incur a 10% early withdrawal penalty plus income taxes. Exceptions include: hardship withdrawals (medical, home purchase, education), 401k loans (must repay with interest), Rule of 55 (if you leave job at 55+), and certain qualified expenses. However, early withdrawals should be avoided as they cost you not just penalties and taxes, but also decades of compound growth. Consider 401k loans or hardship withdrawals only as last resort.
Historical average for diversified stock portfolios (like S&P 500) is about 10% annually before inflation. Conservative estimates use 7-8% to account for fees, inflation, and market volatility. Your actual returns depend on investment choices: Aggressive (90-100% stocks): 8-10% long-term, Moderate (60-70% stocks): 6-8%, Conservative (30-40% stocks): 4-6%. Younger investors should be more aggressive, gradually shifting to conservative as retirement approaches. Use 7-8% for realistic planning.
Priority order for your money: 1) Contribute enough for full employer match, 2) Pay off high-interest debt (credit cards >10%), 3) Build emergency fund (3-6 months expenses), 4) Max out 401k if possible ($23,000 in 2024), 5) Consider IRA or taxable investments. Maxing out is ideal for retirement security and tax benefits, but balance with other financial goals. If you can't max out, at least increase contributions by 1-2% annually.
You have 4 options: 1) Leave it with old employer (if balance >$5,000) - simple but may have limited options, 2) Roll over to new employer's 401k - consolidates accounts, 3) Roll over to IRA (most popular) - more investment options, lower fees, 4) Cash out (not recommended) - triggers taxes + 10% penalty. Rolling over to IRA or new 401k is usually best to maintain tax advantages and continue compound growth. Never cash out unless absolutely necessary.
Traditional 401k: Withdrawals taxed as ordinary income at your tax rate in retirement. Required Minimum Distributions (RMDs) start at age 73 - you must withdraw a certain percentage annually. Roth 401k: Qualified withdrawals (after age 59½ and account open 5+ years) are completely tax-free, including all growth! Early withdrawals from either type may face 10% penalty plus taxes on earnings. Plan your withdrawals strategically to minimize taxes - consider Roth conversions, timing of Social Security, and managing tax brackets.
Yes! You can contribute to both 401k and IRA in the same year. 401k limit: $23,000 (2024), IRA limit: $7,000 (2024). However, IRA tax deduction may be limited if you're covered by a 401k and earn above certain income thresholds ($77,000-$87,000 single, $123,000-$143,000 married in 2024). Consider Roth IRA if income allows - no income limits for Roth 401k, but Roth IRA has income limits ($153,000-$161,000 single). Strategy: Max 401k first for employer match, then IRA for more investment options.
Most 401k plans offer: Target-date funds (auto-adjust based on retirement year - good for beginners), Index funds (low-cost, track S&P 500 or total market), Mutual funds (actively managed, higher fees), Bond funds (conservative, lower returns), Company stock (risky - don't overconcentrate). Choose based on age: 20s-30s: 90-100% stocks, 40s-50s: 70-80% stocks, 60s+: 50-60% stocks. Consider target-date funds for simplicity or build your own portfolio with low-cost index funds.
Comprehensive retirement planning with multiple income sources
Calculate Traditional and Roth IRA growth
Plan tax-free retirement income
Estimate Social Security benefits
Calculate pension income and lump sum value
See the power of compound growth
This 401k calculator is developed and maintained by financial planning experts at CalcFinex. Our calculations are based on IRS guidelines, Department of Labor regulations, and industry-standard financial formulas used by certified financial planners.
Last Updated: December 21, 2024 - Updated with 2024 contribution limits and tax regulations.
Accuracy Note: While we strive for accuracy, this calculator provides estimates for educational purposes. Consult a certified financial planner or tax professional for personalized advice.
Customize match percentage and limit - most calculators use fixed formulas
Side-by-side tax analysis - competitors show only one type
Factor in annual raises for realistic projections - often missing elsewhere
Detailed annual projection table - most show only final number
Shows real retirement value after taxes - critical but often ignored
Perfect experience on phone, tablet, and desktop - many competitors desktop-only
Instant calculations without signup - competitors often require email
12+ FAQs, strategies by age, common mistakes - most thorough guide available