401(k) Retirement Calculator
Projects your 401(k) balance at retirement by compounding your current savings and ongoing contributions with employer matching. Use it when planning how much to save or evaluating the impact of a salary raise or contribution change.
About this calculator
Your 401(k) grows through two streams: the compound growth of your existing balance and the future value of your ongoing contributions. The formula is: FutureValue = currentBalance × (1 + r)^n + (salary × contribution% × (1 + employerMatch%)) × ((1 + r)^n − 1) / r, where r is the annual return rate and n is years to retirement. The first term compounds your current savings over time. The second term treats each year's total contribution (your share plus the employer match) as an annuity, summing its future value. Employer matching is essentially free money — a 50% match on a 6% contribution adds an extra 3% of salary each year. Small increases in contribution rate or return rate have outsized effects over long horizons due to exponential compounding.
How to use
Suppose you have $20,000 saved, earn $60,000/year, contribute 6%, receive a 50% employer match, expect a 7% annual return, and retire in 25 years. r = 0.07, n = 25. Annual contribution = $60,000 × 6% × (1 + 50%) = $5,400. FutureValue = $20,000 × (1.07)^25 + $5,400 × ((1.07)^25 − 1) / 0.07 = $20,000 × 5.4274 + $5,400 × 63.249 = $108,548 + $341,544 ≈ $450,092 at retirement.
Frequently asked questions
How does employer matching affect my 401(k) balance at retirement?
Employer matching amplifies every dollar you contribute without any extra cost to you. For example, a 50% match on a 6% contribution effectively raises your contribution rate to 9% of salary. Over 25 years at a 7% return, that extra 3% of salary compounds dramatically — potentially adding over $100,000 to your balance. Always contribute at least enough to capture the full employer match, as it is one of the highest guaranteed returns available.
What annual return rate should I use for my 401(k) projection?
A commonly used long-term assumption for a diversified stock-and-bond portfolio is 6–7% annually, which accounts for historical market returns minus inflation and fees. More aggressive stock-heavy portfolios might use 8%, while conservative bond-heavy ones might use 4–5%. Keep in mind that actual returns vary year to year, and fees in your plan can reduce effective returns by 0.5–1.5%. Running scenarios at both 5% and 7% gives you a realistic range to plan around.
When should I increase my 401(k) contribution percentage?
The best times to raise your contribution rate are after a salary increase, when you pay off a debt, or when your budget allows after a lifestyle review. A common strategy is to increase contributions by 1–2% each year until you reach the IRS annual limit ($23,000 in 2024, plus $7,500 catch-up if you are 50 or older). Even a 1% increase on a $60,000 salary adds $600 per year before matching, which compounds significantly over decades. Starting early has the greatest impact because those dollars have the most time to grow.