401k Calculator

A 401(k) is an employer-sponsored retirement savings plan in the United States that allows employees to invest pre-tax (or Roth after-tax) dollars. The combination of tax advantages and employer matching makes it one of the most powerful wealth-building tools available.

Future Value with regular contributions: FV = PMT × [((1 + r)ⁿ − 1) / r] + PV × (1 + r)ⁿ

What each variable means:

• PMT: your monthly contribution (employee portion)
• r: monthly return rate (annual rate ÷ 12)
• n: total number of months until retirement
• PV: current 401(k) balance (present value)
• Employer Match: free money added by your employer, typically 50–100% of your contribution up to a salary limit

2026 contribution limits:

• Employee max: $24,500/year ($2,041.67/month)
• Catch-up (age 50+): additional $8,000/year
• Total combined (employee + employer): $72,000/year

These move most years with inflation, so check the current figure with the IRS before setting your rate for a new tax year. The calculator flags it if the percentage you enter would take you past the employee limit at your salary.

A note on r. The rate you type is an annual return, so the monthly rate is its twelfth root, not the annual figure divided by 12. Dividing by 12 quietly turns a 7% return into 7.23%, which over thirty-odd years is not a rounding error. This calculator takes the twelfth root, so 7% in means 7% a year out.

Worked example: Age 30, current balance $15,000, contributing $500/month. Employer matches 50% up to 6% of a $70,000 salary, which is $2,100/year, or $175/month. Total monthly investment $675. Assumed return 7%/year. Retire at 67, so 37 years or 444 months.

Monthly rate = 1.07^(1/12) − 1 = 0.5654% Growth factor over 444 months = 1.07³⁷ = 12.2236 FV from contributions = $675 × [(12.2236 − 1) / 0.005654] = $1,339,892 FV from the existing $15,000 = $15,000 × 12.2236 = $183,354 Total projected balance: ~$1,523,246

Out of your own pocket: $500 × 444 = $222,000 Employer gave you: $175 × 444 = $77,700 The remaining $1,208,546 is growth, which is the whole argument for starting early.

Key rule: Always contribute at least enough to capture the full employer match. It is an immediate 50–100% return on that portion of your money, and it is the one part of investing where the return is guaranteed. A match is paid against what you contribute, so contributing nothing collects nothing, no matter what your employer offers.

Traditional vs Roth: Traditional 401(k) reduces taxable income now but withdrawals are taxed. Roth 401(k) uses after-tax dollars but grows and is withdrawn completely tax-free.