401(k) Retirement Calculator

How the projection works

This calculator runs your 401(k) forward one year at a time rather than applying a single compound-interest formula, because the two moving parts — your salary and your balance — grow at different rates. Each year it works out what you pay in as a percentage of that year's salary, adds what your employer matches, grows the balance you already had by the expected return, and then gives the new contributions credit for roughly half a year of growth. That half-year convention matters: money paid in through payroll deductions arrives a bit at a time, so treating it as if it had been invested on 1 January overstates the result by a few percent over a long career.

The employer match is calculated as the smaller of your contribution rate and the match cap. If your plan matches dollar for dollar up to 4% of salary and you contribute 10%, you get the full 4%. If you contribute 3%, you get 3% — not 4%. Salary then grows by your assumed raise percentage and the loop repeats until the year before your retirement age.

Worked example: 30 years old, retiring at 65

Take the defaults: 25,000 already saved, a 70,000 salary, 10% from you, a 4% employer match, 7% returns and 3% annual raises. In year one you pay in 7,000 and your employer adds 2,800, a total of 9,800. The existing 25,000 grows to 26,750 and the new 9,800 earns half a year of growth, adding 10,143. The balance ends year one at 36,893.

Year two starts with a 72,100 salary after the 3% raise, so contributions rise to 7,210 plus 2,884. The 36,893 grows to 39,475 and the 10,094 of new money contributes 10,447, ending the year at 49,923. Repeat that 35 times and the projection lands at about 2,260,700 — made up of 423,200 of your own money, 169,300 from your employer, and roughly 1,643,200 of investment growth. Nearly three quarters of the final balance is growth you never earned at work.

Worked example: the same plan started at 40

Change nothing except the starting age and the picture shrinks hard: 40 to 65 on identical assumptions produces about 981,000. Ten fewer years of contributions cost 168,000 of deposits, but they cost over a million in growth, because the earliest dollars are the ones with the most time to compound. This is the strongest argument in personal finance for contributing something now rather than the right amount later.

Fund the match before anything else

If you contributed only 3% in the example above — just below the 4% cap — the projection falls to roughly 1,121,000 and the employer total drops from 169,300 to 127,000. You gave up an instant 100% return on the money you did not contribute. Before paying extra into a mortgage, a brokerage account or even a Roth IRA, most US advisers would tell you to contribute at least up to the full match, because nothing else offers a guaranteed doubling on the way in. The one thing to check is your vesting schedule: cliff vesting can mean leaving before your third anniversary forfeits every matched dollar.

How sensitive the answer is to the return you assume

One percentage point moves the answer by roughly 400,000 on this example. Treat any single projection as the centre of a wide range, not a promise, and re-run it with a pessimistic number before making a decision that depends on the outcome.

What this does not account for

The result is in future dollars, not today's. At 3% inflation, 2.26 million in 35 years buys what about 800,000 buys now; entering 4% instead of 7% as the return is a rough shortcut to an inflation-adjusted answer. Traditional 401(k) withdrawals are also taxed as ordinary income, so the balance is not spendable money — a Roth 401(k) shifts that tax to today instead. Fund expense ratios and plan administration fees come straight off returns, IRS deferral limits cap how much you can actually put in each year, and real markets deliver their average in a jagged sequence, which means a bad decade just before retirement hurts far more than the same decade at 30. Use the number to compare choices, not to plan a spending budget.