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How to Use Our 401(k) Calculator

3 min read

How to Use Our 401(k) Calculator

Your 401(k) is likely your most powerful retirement savings tool. Our 401(k) Calculator helps you understand how your contributions, employer match, and investment returns combine to build your retirement nest egg.

Key Inputs

  • Annual Salary -- Your gross annual income. This determines your contribution limits and employer match amounts.
  • Contribution Percentage -- The percentage of your salary you contribute. The IRS limit for employee contributions is $23,000 in 2024 (plus $7,500 catch-up if you are 50 or older).
  • Employer Match -- Your employer's matching formula. A common match is 50% of your contributions up to 6% of salary, or dollar-for-dollar up to 3-4%.
  • Current Balance -- What you already have in your 401(k).
  • Expected Return -- Your anticipated annual return based on your investment mix.
  • Years Until Retirement -- How many years you plan to keep contributing.

Reading the Results

Projected Balance -- Your estimated 401(k) value at retirement, including your contributions, employer match, and investment growth.

Employer Match Value -- The total free money from your employer over the projection period. This number alone is often enough to convince people to contribute at least enough to get the full match.

Your Contributions vs Growth -- A breakdown showing how much came from your deposits versus how much came from investment returns. Over long periods, compound growth often exceeds total contributions.

The One Rule Everyone Should Follow

Always contribute at least enough to get the full employer match. If your employer matches 50% up to 6% of salary and you earn $75,000, contributing 6% ($4,500/year) earns you $2,250 in free money annually. Not contributing enough to get the full match is literally leaving money on the table.

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