401(k) Calculator
Project a 401(k) balance at retirement including employer match, and see exactly what leaving the match unclaimed costs you.
How to use this calculator
- 1Enter your age, salary and current balance.
- 2Set your contribution percentage and your employer’s match formula — both parts matter, the rate and the cap.
- 3If a warning appears about an unclaimed match, act on that before anything else on this page.
How the calculation works
Bₙ = Bₙ₋₁ × (1 + r/12)¹² + FV(monthly contributions)
Employer = min(your %, match cap) × salary × match rate- B
- Balance at the end of each year
- r
- Expected annual return
- match cap
- The share of salary your employer will match up to
A "50% match up to 6%" means: contribute 6% of salary and the employer adds 3%. Contributing more than 6% earns no additional match.
Contributions are modelled monthly, which is how payroll deferrals actually work, so growth compounds through the year rather than landing in a lump at year end.
The employee contribution is capped at the annual IRS limit, with the catch-up amount applied from age 50.
Worked example
35 years old, $75,000 salary, 8% contribution, 50% match up to 6%
- 1.Year one: you contribute 8% of $75,000 = $6,000.
- 2.The employer matches 50% of the first 6% of salary: 6% × $75,000 × 50% = $2,250.
- 3.That is $8,250 into the account in year one, growing at 7% and compounding monthly.
- 4.Over 30 years with 3% salary growth, the balance reaches roughly $1.29 million.
Result: About $1.29 million at 65
What a 401(k) is
A 401(k) is a retirement savings account offered through an employer, named after the section of the US tax code that authorizes it. Contributions are deducted directly from payroll before the money reaches your bank account, and, in a traditional plan, before income tax is calculated on that portion of your pay — which is why the deduction shrinks your taxable income for the year it is made rather than simply setting cash aside.
Because the plan is administered by the employer, the investment choices are usually limited to a curated menu of funds selected by the plan provider, rather than the open selection available in a self-directed brokerage account. That trade-off — less choice, in exchange for payroll convenience and, often, an employer contribution — is what distinguishes a 401(k) from an individual account opened independently.
The employer match, mechanically
An employer match is additional money the company contributes on top of what you put in yourself, calculated from a formula with two parts: a match rate (how much they add per unit you contribute) and a match limit (the share of salary above which they stop matching, regardless of how much more you contribute). A plan described as "50% up to 6%" adds fifty cents for every dollar contributed, but only on the first 6% of salary — contributing 10% still only draws a match on that first 6%.
Because the match is added on top of your own contribution rather than replacing it, it functions as an immediate return with no market risk attached to the act of receiving it — the closest thing most household finances encounter to free money.
Vesting: when the match becomes fully yours
Employer contributions are not always yours outright the moment they land in the account. Many plans attach a vesting schedule, meaning full ownership of the employer’s contributions builds up over a period of continued employment.
- Immediate vesting — employer contributions belong to you as soon as they are made — no waiting period.
- Cliff vesting — you own none of the employer contributions until a specific length of service is reached, at which point you own all of them at once.
- Graded vesting — ownership builds up in increments — for example a fixed percentage per year of service — until you are fully vested.
Traditional or Roth contributions
Many plans let you choose, contribution by contribution, between traditional and Roth treatment. Traditional contributions reduce taxable income now and are taxed as ordinary income when withdrawn in retirement; Roth contributions are made with money that has already been taxed, and qualifying withdrawals in retirement are tax-free. The choice comes down to a comparison between your tax rate today and your expected tax rate in retirement — the Roth IRA calculator on this site walks through that comparison in detail, and the same logic applies to a Roth 401(k) option.
Rules that shape the account
A handful of rules distinguish a 401(k) from an ordinary investment account, independent of what it holds.
- Annual contribution limits — the amount you can contribute each year is capped and adjusted periodically, with a higher limit available from a certain age onward as a catch-up allowance — this calculator applies the current published figures automatically.
- Early withdrawal penalties — money taken out before retirement age is typically subject to tax plus an additional penalty, on top of ordinary income tax for traditional contributions, with a short list of exceptions.
- Required minimum distributions — traditional 401(k) balances must generally start being withdrawn from a certain age, whether or not the money is needed, so the account cannot simply be left untouched indefinitely.
- Loans and hardship withdrawals — some plans allow borrowing against the balance or an early withdrawal for defined hardships, under narrower terms than an ordinary bank loan.
Getting the most from it
A few decisions do most of the work in whether a 401(k) meets its potential over a career.
- 1Contribute at least to the match — anything less leaves part of your compensation unclaimed.
- 2Increase contributions as pay rises — even a small automatic increase each year compounds meaningfully over a career.
- 3Roll the balance over, don’t cash it out — when changing jobs, moving the balance into a new employer’s plan or an IRA avoids taxes, penalties, and losing years of tax-advantaged growth.
- 4Check the fund fees — a plan’s investment options can carry very different expense ratios for similar exposure — a cheaper equivalent fund, where offered, keeps more of the growth.
What this assumes, and where it stops
Assumptions
- Returns are constant at the rate you entered. Real markets deliver the same average through a very different path.
- Contribution limits stay at their current level; in reality they are indexed to inflation and will rise.
- You remain employed with the same match formula throughout.
- No loans, hardship withdrawals or early distributions.
Limitations
- Balances are pre-tax. Traditional 401(k) withdrawals are taxed as ordinary income in retirement, so the spendable amount is lower.
- Vesting schedules are not modelled — employer contributions may not be fully yours for several years.
- Required minimum distributions from age 73 are not modelled.
- Investment fees are not deducted. A 1% annual fee typically removes around 20% of the final balance over 30 years.
Common questions
How much should I contribute to my 401(k)?
At an absolute minimum, enough to capture the full employer match — that is a guaranteed immediate return of whatever the match rate is, and declining it is turning down part of your compensation. Beyond that, a commonly cited target is 15% of salary including the match, though the right figure depends on your age, other savings and when you plan to stop working.
What is a 401(k) employer match?
Money your employer adds when you contribute. A typical formula is "50% up to 6%" — contribute 6% of salary and they add 3%. It is the highest-return element of almost any financial plan: a 50% match is an instant 50% return before the market does anything at all.
Traditional or Roth 401(k)?
Traditional contributions reduce your tax bill now and are taxed on withdrawal; Roth contributions are taxed now and come out tax-free. The choice turns on whether your tax rate in retirement will be higher or lower than it is today. The Roth IRA calculator on this site models that comparison directly.
Sources
- IRS Notice 2024-80 — retirement plan limits — US Internal Revenue Service
Formula and content last reviewed on .
Results are estimates for information only, not professional advice.
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