What this retirement calculator does
Each year it takes your salary (growing by your annual raise), multiplies it by your contribution percentage, adds your employer's match, and spreads those deposits evenly across 12 monthly contributions. The balance grows at your expected annual return, converted to an equivalent monthly rate. The result is shown in future dollars and, using your inflation estimate, in today's dollars, which is the number to compare with what things cost now.
How employer matching works
A typical match formula reads like "50% of your contributions, up to 6% of pay". On a $65,000 salary, contributing 6% ($3,900) earns a $1,950 match. Contributing 10% still earns $1,950, because the match stops at 6% of salary. Contributing only 3% earns just $975. Enter your plan's formula from your benefits summary. If your employer matches dollar for dollar, use 100%. Contributing at least enough to get the full match is one of the highest-return moves available to most workers.
Contribution limits
The IRS sets an annual limit on employee 401(k) contributions, plus extra "catch-up" amounts for workers 50 and older, and adjusts them for inflation most years. This calculator does not apply those limits automatically, so it never goes out of date. If your contribution percentage times your salary would exceed the current limit, lower the percentage. You can find this year's limits on IRS.gov.
Choosing your assumptions
- Return: a diversified stock-heavy portfolio has historically averaged more than a bond-heavy one, with bigger swings. Many planners use 5% to 7% for long-term projections; lower it as you approach retirement.
- Inflation: 2% to 3% is a common long-run assumption.
- Fees: subtract your funds' expense ratio from the return. A 1% fee can reduce a 35-year balance by more than 20%.
How much is enough?
The 4% line gives a rough sense of income: withdrawing 4% of the balance in the first year of retirement, then adjusting for inflation, has historically lasted about 30 years in most market conditions. Add expected Social Security and any pension to see your total retirement income. If the result falls short, the levers are the same: contribute more, start earlier, retire a bit later, or keep fees low.
Frequently asked questions
How much will my 401(k) be worth when I retire?
It depends on your balance, contributions, employer match, years until retirement and returns. Saving $500 a month for 35 years at a 7% annual return grows to roughly $850,000 before inflation.
What does a 50% match up to 6% mean?
Your employer adds 50 cents for every dollar you contribute, on contributions up to 6% of your salary. The maximum match is therefore 3% of your salary.
Does this include Roth or traditional taxes?
No. It shows account balances before any taxes on withdrawals. Traditional 401(k) withdrawals are taxed as income; qualified Roth withdrawals are tax-free.
What return should I use?
Long-term projections often use 5% to 7% before inflation for a stock-heavy portfolio. Using a lower number gives a more conservative plan.