401(k) Calculator

401(k) Calculator

This 401(k) calculator estimates your retirement savings by projecting how your employee contributions, employer match, and compound investment growth accumulate over time. Use it to see whether you are on track to meet your retirement goals and how adjusting your contribution rate can dramatically change your outcome.

How Your 401(k) Balance Is Calculated

Your projected balance uses the compound interest formula applied to recurring contributions. Each month, your contribution and your employer’s matching contribution are added, then the entire balance grows at the expected annual return rate compounded monthly.

FV = PV(1 + r)^n + PMT x [((1 + r)^n - 1) / r]

Where PV is your current balance, PMT is your total monthly contribution (employee + employer match), r is the monthly rate of return, and n is the total number of months until retirement.

Example

Key Factors That Affect Your 401(k) Growth

• Contribution rate — even a 1-2% increase can add tens of thousands over a career due to compounding
• Employer match — this is free money; contribute at least enough to capture the full match
• Time horizon — starting five years earlier can add 30-40% more to your final balance
• Rate of return — a 1% difference in annual returns compounds to a large gap over decades
• Current balance — an existing balance benefits from compound growth on a larger base

Tips

1. Always contribute at least enough to get your full employer match before directing money elsewhere
2. Increase your contribution by 1% each year — you will barely notice the paycheck difference but the long-term impact is significant
3. If you are over 50, take advantage of catch-up contributions (an extra $7,500 per year in 2024-2025)
4. Review your asset allocation annually to ensure your investment mix aligns with your retirement timeline