401k Retirement Calculator
Project your 401k savings growth with employer match, salary increases, and compound returns. Plan your US retirement with confidence.
Calculate Your 401k Growth
The 2024 401k contribution limit is $23,000 ($30,500 if age 50+). Employer match is free money — always contribute at least enough to get the full match.
What is a 401k?
A 401(k) is a tax-advantaged retirement savings account offered by US employers. Contributions are made pre-tax (Traditional 401k) or after-tax (Roth 401k), reducing your taxable income. The account grows tax-deferred until withdrawal at retirement age (59½+).
2024 401k Contribution Limits
- Employee contribution limit: $23,000 per year (up from $22,500 in 2023)
- Catch-up contribution (age 50+): Additional $7,500 = $30,500 total
- Total limit (including employer match): $69,000 or 100% of compensation
- 403(b) plans (nonprofits/schools) have the same limits
Traditional vs Roth 401k
- Traditional 401k: Pre-tax contributions. Pay taxes on withdrawal. Better if you expect lower tax rate in retirement.
- Roth 401k: After-tax contributions. Withdrawals in retirement are tax-free. Better if you expect higher tax rate in retirement.
- Many employers offer both options — you can split contributions between them
Employer Match — Never Leave Free Money
- Common match: 50% of your contributions up to 6% of salary = 3% of salary free
- Some employers match 100% up to 3–6% of salary
- Vesting schedule: employer match may vest over 3–6 years
- Always contribute at least enough to get the full employer match
How Your 401(k) Grows: The Power of Compounding
The reason starting early matters so much is compound growth. Suppose you contribute $500 a month starting at age 30, your employer adds a 50% match on the first 6% of a $60,000 salary, and the account earns an average 7% annual return. By age 65 the balance could exceed $1.3 million — and well over half of that total is investment growth rather than the money you actually contributed. Delaying just ten years, starting at 40 instead of 30, can cut the final balance roughly in half, because the earliest dollars have the longest time to compound.
When Can You Withdraw Your 401(k)?
- Age 59½: Penalty-free withdrawals begin. Traditional 401(k) withdrawals are taxed as ordinary income; qualified Roth withdrawals are tax-free.
- Before 59½: Withdrawals usually incur a 10% early-withdrawal penalty plus income tax, with limited exceptions (disability, certain hardships, the Rule of 55).
- Required Minimum Distributions (RMDs): You must begin withdrawing from a Traditional 401(k) at age 73. Roth 401(k)s no longer require RMDs during the owner's lifetime under recent rules.
401(k) vs IRA — Use Both
A 401(k) offers a much higher contribution limit and the valuable employer match, but a limited menu of investment funds. An IRA has a lower contribution limit but lets you invest in almost any stock, bond, or fund. A common strategy is to contribute to your 401(k) up to the full employer match (free money), then fund an IRA for its wider investment choice, and finally return to the 401(k) to use up the remaining limit.
What This Calculator Assumes
Projections assume a constant annual return and steady contributions, compounded over time. Real markets fluctuate year to year, so treat the result as a planning estimate rather than a guarantee. Adjusting the expected return by even one or two percentage points significantly changes the projected balance — try a conservative figure (around 6–7%) for a realistic baseline.
Frequently Asked Questions — 401k Calculator
The IRS 401k contribution limit for 2024 is $23,000 for employee contributions (up from $22,500 in 2023). If you are age 50 or older, you can make an additional catch-up contribution of $7,500, bringing your total limit to $30,500. The combined employee + employer total limit is $69,000 (or $76,500 with catch-up).
A common employer match is "50% of contributions up to 6% of salary." If you earn $80,000 and contribute 6% ($4,800), your employer adds 3% ($2,400). Always contribute at least enough to capture the full employer match — it's an immediate 50–100% return on that money. Not doing so is leaving part of your compensation on the table.
Traditional 401k: contributions are pre-tax (reduce your taxable income now), but withdrawals in retirement are taxed as ordinary income. Roth 401k: contributions are after-tax (no immediate deduction), but qualified withdrawals in retirement are completely tax-free. Choose traditional if you expect to be in a lower tax bracket in retirement; choose Roth if you expect higher taxes later or want tax-free growth.
You can withdraw from a 401k without the 10% early withdrawal penalty starting at age 59½. Withdrawals are still taxed as ordinary income unless it's a Roth 401k. At age 73, you must begin taking Required Minimum Distributions (RMDs). Some hardship exemptions (disability, first home purchase for IRAs, etc.) may allow early access without penalty.
You have four options: (1) Leave it with your former employer's plan if allowed. (2) Roll it over to your new employer's 401k. (3) Roll it over to an IRA — more investment options and control. (4) Cash it out — not recommended, as you'll owe income taxes plus a 10% penalty if under 59½. Rolling to an IRA is usually the best choice for flexibility.
At minimum, contribute enough to get the full employer match. A common target is 15% of gross income (including employer match) for retirement savings. If you're starting late, aim higher. As a benchmark: contribute $23,000/year from age 30 at a 7% return and you'll have over $2.4 million by 65. Even small increases early have a dramatic impact due to compound growth.