Unlock the power of a traditional 401(k) plan to build a secure retirement. With tax-deferred growth and potential employer matching—often ranging from 50% to 100%—your savings can grow faster than you ever imagined. Enjoy the advantage of deferring taxes until you withdraw funds, and take full advantage of your employer’s contributions, which are essentially free money.
Maximize Your Retirement Savings
Your 401(k) plan offers two major benefits: tax deferral and employer matching. Contributions and investment earnings grow tax-free until withdrawal, allowing your money to compound over time. Many employers enhance this growth with matching contributions, boosting your overall savings and accelerating your path to a comfortable retirement.
401(k) Retirement Calculator
Key Terms and Definitions
Percent to Contribute: The percentage of your annual salary that you allocate to your 401(k) plan. Most employers allow you to contribute up to 100% of your salary, subject to IRS limits.
Annual Salary: Your gross income from your employer before taxes and deductions. Contributions and matching amounts are calculated based on this figure.
Annual Contributions: This is determined by multiplying your annual salary by your chosen contribution percentage. Note that contributions are subject to annual limits—for example, $22,500 in 2023, with an additional $7,500 catch-up contribution available for those aged 50 and older.
Current Age and Retirement Age: Your current age and the age at which you plan to retire. The calculator assumes that contributions cease in the year you retire (i.e., if you retire at 65, your final contribution is made at age 64).
Current 401(k) Balance: The amount already saved or invested in your 401(k) account, which serves as the starting balance for future growth calculations.
Annual Rate of Return: An estimate of how much your investments might earn each year, compounded annually. While historical averages like the S&P 500’s 10% long-term return can provide a benchmark, actual returns may vary with market conditions and the mix of investments you choose.
Annual Salary Increase: The percentage by which you expect your salary to grow each year until retirement, which in turn can increase your annual contributions.
Employer Match: An additional contribution made by your employer based on a percentage of your annual contributions. For example, if your employer matches 50% of contributions up to 6% of your salary, contributing 10% on a $100,000 salary would yield $10,000 from you and an extra $3,000 from your employer.
Employer Maximum: The cap on the employer match, typically defined as a percentage of your salary. Even if you contribute more than this threshold, the employer match remains limited to the specified maximum. For instance, with a 50% match capped at 6% of your salary, increasing your contribution beyond 6% won’t result in additional matching funds.
