401(k) Retirement Calculator
Projects your 401(k) balance at retirement by compounding your current savings and annual contributions — including employer matching — at an expected return. Use it to see whether you are on track for retirement.
About this calculator
The calculator combines two future-value components. The first grows your existing balance: FV₁ = currentBalance × (1 + r)^t, where r is the annual return rate and t is years to retirement. The second grows your ongoing contributions as an annuity: FV₂ = annualContribution × ((1 + r)^t − 1) / r, where annualContribution = annualSalary × (contributionRate + employerMatch) / 100. The total projected balance is FV₁ + FV₂. This is a future-value-of-an-annuity formula assuming contributions are made at year-end (ordinary annuity). Employer match is treated as additional contribution dollars on top of your own deferral. Importantly, this is a pre-tax, nominal projection — inflation and taxes at withdrawal are not included, so the real purchasing power will be lower than the headline number.
How to use
Inputs: current balance $50,000, salary $80,000, your contribution 6%, employer match 3%, years to retirement 25, annual return 7%. Step 1: Annual contribution = $80,000 × (6 + 3) / 100 = $7,200. Step 2: Growth of current balance: $50,000 × (1.07)^25 = $50,000 × 5.4274 = $271,370. Step 3: Growth of contributions: $7,200 × ((1.07)^25 − 1) / 0.07 = $7,200 × (5.4274 − 1) / 0.07 = $7,200 × 63.249 = $455,393. Step 4: Total = $271,370 + $455,393 = $726,763.
Frequently asked questions
How does employer 401(k) matching affect my retirement balance?
Employer matching is essentially free money that directly increases your annual contribution total in the formula. In the calculator, your match rate is simply added to your own contribution rate before calculating the annual dollar amount going into the account. A 3% match on an $80,000 salary adds $2,400/year; compounded at 7% over 25 years, that single match adds over $150,000 to your final balance. Always contribute at least enough to capture the full employer match — failing to do so is leaving a 50–100% guaranteed return on the table.
What annual return rate should I use for my 401(k) projection?
Historical average annualized returns for a diversified US stock portfolio have been around 7–10% nominally. For a balanced portfolio (60% stocks, 40% bonds), a 5–7% nominal return is a reasonable planning assumption. Most financial planners suggest using 6–7% to be moderately optimistic, or 5% for conservative planning. Inflation historically runs around 2–3%, so subtract that to estimate real (purchasing-power-adjusted) growth. The calculator uses a nominal rate, so the projected balance is in future dollars, not today's dollars.
When should I start contributing to a 401(k) to maximize my retirement savings?
The earlier the better, because compound growth is exponential — your contributions in your 20s have the most time to grow. A 25-year-old contributing $5,000/year at 7% for 40 years accumulates about $1.07 million; the same person starting at 35 accumulates only about $505,000. The difference is not the extra 10 years of contributions ($50,000) — it is the decades of compounding on those early dollars. If you cannot contribute the maximum ($23,000 in 2024), prioritize capturing the full employer match first, then increase your rate each time you get a raise.