401(k) Calculator

A 401(k) is an employer-sponsored retirement account that lets you invest a portion of your paycheck for the future, often with significant tax advantages. Contributions to a traditional 401(k) are made before tax, lowering your taxable income today, and the money grows tax-deferred until you withdraw it in retirement. A Roth 401(k), where available, reverses this — you contribute after-tax dollars but withdraw tax-free later.

The single most valuable feature of many 401(k) plans is the employer match. Employers commonly match a percentage of your contributions up to a limit — for example, 50% of contributions up to 6% of your salary. This is effectively free money and an immediate, guaranteed return on your savings that no investment can match. Contributing at least enough to capture the full match should be a top financial priority; leaving it on the table is like declining part of your compensation.

Three forces drive your 401(k)'s growth: your contributions, the employer match, and investment returns compounding over time. Because of compounding, money invested in your twenties and thirties does far more work than money added later. Contributions are capped annually by the IRS — the limit rises most years, with additional catch-up contributions allowed for those 50 and older — so high earners may max out and need other accounts too.

The long-run numbers can be striking. Steady contributions of even 10–15% of salary, boosted by a match and decades of compounding at a typical diversified return, frequently grow into a balance many times the total you personally contributed. The earlier and more consistently you contribute, the larger the share of your final balance that comes from growth rather than your own paycheck.

A few cautions: 401(k) funds are intended for retirement, and early withdrawals before age 59½ generally trigger taxes plus a 10% penalty. Investment returns are never guaranteed, and your balance will rise and fall with the market. Still, for most workers the combination of tax advantages, employer matching and automatic payroll contributions makes the 401(k) the most efficient wealth-building tool available. This calculator shows what consistent contributing can build over your career.