401(k) Calculator
A 401(k) is an employer-sponsored retirement account that lets you invest pre-tax dollars, deferring taxes on contributions and growth until withdrawal — while many employers also add free matching contributions.
Project your 401(k) balance at retirement based on your current savings, contribution rate, employer match, and expected investment return. See year-by-year growth and estimated monthly income.
Use this 401(k) calculator to project your retirement balance and test different scenarios instantly — change contribution rate, employer match, or return assumptions to see the impact in real time.
| Year | Total Contributed | Balance |
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How Your 401(k) Grows Over Time
A 401(k) calculator reveals the extraordinary power of tax-deferred compounding and employer matching over a working career. Small increases in contribution rates — especially early in your career — can translate to hundreds of thousands of extra dollars at retirement. The two forces working in your favor: free employer match and decades of compound growth on pre-tax dollars.
Always Capture the Full Employer Match
The employer match is the single best investment available to most workers — a guaranteed 50–100% instant return before any market gains. A 50% match on up to 6% of salary means contributing 6% of a $70,000 salary ($4,200/year) earns you $2,100 in free employer money each year. Over 25 years at 7%, that $2,100/year match alone compounds to roughly $148,000. Never leave matching dollars on the table. If you can only afford one contribution amount, make it whatever captures the full match.
2025 Contribution Limits
The IRS sets annual 401(k) contribution limits. For 2025, employees can contribute up to $23,500. Workers aged 50–59 and 64+ can make an additional $7,500 catch-up contribution ($31,000 total). A new provision for 2025: workers aged 60–63 have an enhanced super catch-up limit of $11,250 instead of $7,500. Employer contributions are separate and can bring total 401(k) contributions to $70,000 ($81,250 with catch-up). These limits typically increase slightly each year with inflation adjustments.
Investment Return Assumptions
The return rate you use dramatically affects projections. The S&P 500 has returned roughly 10% annually before inflation and 7% after inflation over long historical periods. Most financial planners recommend 6–7% as a conservative real return assumption for long-term projections. Aggressive portfolios (mostly stocks) might use 8–9%; conservative portfolios (mixed stocks and bonds closer to retirement) might use 4–6%. For retirement planning, always use conservative estimates to avoid overestimating your future balance.
The 4% Withdrawal Rule
This calculator estimates monthly retirement income using the 4% rule — withdraw 4% of your starting balance in year one, then adjust for inflation annually. Research suggests this strategy has historically sustained a 30-year retirement across most market conditions. A $1,000,000 balance generates $40,000/year or $3,333/month under this rule. A $500,000 balance generates $20,000/year or $1,667/month. Use it as a planning benchmark, not a hard guarantee. Explore our how much do you need to retire guide for a deeper analysis.
The Real Cost of Starting Late
Compounding rewards early savers disproportionately. The table below shows how the same $300/month contribution produces wildly different results depending on when you start, assuming a 7% average annual return and retirement at 65:
| Start Age | Monthly Contribution | Total Invested | Balance at 65 | Monthly Income (4%) |
|---|---|---|---|---|
| 25 | $300 | $144,000 | ~$798,000 | ~$2,660/mo |
| 35 | $300 | $108,000 | ~$379,000 | ~$1,263/mo |
| 45 | $300 | $72,000 | ~$156,000 | ~$520/mo |
| 35 (doubled) | $600 | $216,000 | ~$758,000 | ~$2,527/mo |
Starting at 25 with $300/month beats someone starting at 35 with $600/month — despite investing half as much total money. Doubling contributions can't fully compensate for 10 years of lost compounding. See retirement savings benchmarks by age to see where you should be now.
Key Insight: Increasing your 401(k) contribution by just 1% of salary when you get a raise is one of the most painless wealth-building strategies available. On a $75,000 salary, 1% is $750/year — which compounds to roughly $75,000 over 25 years at 7%. Do it with every raise and you'll max out your account without ever feeling the difference in your paycheck.
Traditional 401(k) vs. Roth 401(k)
Many employers now offer both versions. Traditional 401(k): contributions are pre-tax (reduce your taxable income today); withdrawals in retirement are taxed as ordinary income. Roth 401(k): contributions are after-tax (no upfront deduction); qualified withdrawals in retirement are completely tax-free, including all growth. The decision hinges on your marginal tax rate now vs. expected rate in retirement. If you're early-career with lower income — Roth is almost always better. If you're peak-earning with high income now and expect lower retirement income — traditional may be better. When uncertain, splitting contributions between both hedges against future tax rate changes.
5 Common 401(k) Mistakes That Cost You Thousands
- Cashing out when changing jobs: A $30,000 early withdrawal at age 40 costs a 10% penalty plus income tax — and loses over $180,000 in compounding by age 65. Always roll over to your new employer's plan or a traditional IRA.
- Not increasing contributions after a raise: "Contribution creep" — boosting your 401(k) percentage with every raise — is the most painless path to maximizing your account over time.
- Holding too much company stock: Concentrating in your employer's stock adds employment risk to investment risk. Keep any single stock under 5–10% of the portfolio.
- Overly conservative investments in your 30s–40s: With 20–30 years to retirement, holding too many bonds out of fear of volatility locks in guaranteed underperformance. Time in market beats timing the market.
- Ignoring expense ratios: A 1% annual fund fee vs. a 0.05% index fund costs a $200,000 portfolio nearly $100,000 over 30 years. Choose low-cost index funds wherever available in your plan.
Learn how much you need to retire or check retirement savings benchmarks by age to see if your 401(k) is on track.