US 401(k) Calculator
Project your retirement savings with employer match and compound growth. 2025 IRS contribution limits.
Contribution details
e.g. 50 = 50¢ per $1
% of your salary
Growth assumptions
Why the 401(k) is the most powerful savings tool in the US
Free employer match
The employer match is an instant 50–100% return on the first dollars you contribute. A 50% match on up to 6% of your salary is worth $2,400/year on an $80k salary — tax-deferred on top of that.
Tax-deferred growth
Traditional 401(k) contributions reduce your current-year taxable income and grow tax-deferred. You pay taxes only at withdrawal in retirement — when you may be in a lower bracket.
Compound interest
At 7% annual return, money doubles roughly every 10 years. Starting at 25 instead of 35 results in more than twice the final balance — the extra decade at the start is the most valuable.
2025 IRS limits
Employee limit: $23,500 (up from $23,000 in 2024). Catch-up contribution for age 50+: additional $7,500. Combined employer+employee limit: $70,000. Roth 401(k) counts toward the same $23,500 limit.
The 4% rule
A widely used retirement withdrawal guideline: withdraw 4% of your balance in year 1, adjust for inflation thereafter, and your portfolio should last 30 years. This calculator shows your projected monthly income using this rule.
Roth vs Traditional
Traditional: deduction now, taxes later. Roth: no deduction now, tax-free growth and withdrawal. If you expect to be in a higher bracket in retirement than now, Roth wins. Most people in early career benefit from Roth 401(k) if their employer offers it.
Frequently Asked Questions
How much should I contribute to my 401(k)?
At minimum: whatever gets you the full employer match. If your employer matches 50% on up to 6% of salary, contribute at least 6% — otherwise you leave guaranteed free money. After capturing the full match, the next priority depends on your situation. If you have high-interest debt, pay that first. Otherwise, continue increasing 401(k) contributions up to the limit, especially if you're in a high tax bracket.
What is a good annual return to use for projections?
The US stock market (S&P 500) has returned roughly 10% nominal per year over long periods, but 7% is a more conservative assumption after inflation. For a target-date fund (typical default), 6–7% is a reasonable long-run projection. Higher return assumptions make the projection look better but increase risk of being wrong. We use 7% as the default.
What happens if I leave my job?
You keep 100% of your own contributions. Employer contributions vest on a schedule — immediately (100% vested from day 1), cliff vesting (0% until a milestone, then 100%), or graded (e.g. 20% per year over 5 years). After leaving, you can keep the money in the old 401(k), roll it to a new employer's plan, or roll it to a traditional IRA — all tax-free. Cash out and you owe income tax plus a 10% penalty (before age 59½).
Can I contribute to a 401(k) and an IRA?
Yes — 401(k) and IRA contribution limits are separate. You can contribute up to $23,500 to a 401(k) AND up to $7,000 to a traditional or Roth IRA in 2025 (assuming you meet income limits for Roth). Maxing both gives you $30,500/year in tax-advantaged retirement savings.
Understanding Your 401(k)
A 401(k) is an employer-sponsored retirement account that lets you invest a portion of each paycheck before (or after) tax, where it grows for decades. For most American workers it is the single most powerful wealth-building tool available — not because of any one feature, but because of how the employer match, tax treatment, and compound growth stack on top of each other over a career.
The employer match is free money
A typical match is 50% of your contributions up to 6% of salary, or dollar-for-dollar up to a lower percentage. On an $80,000 salary, a 50%-up-to-6% match adds $2,400 a year to your account at no cost to you. That is an instant 50% return before the market does anything. The single most important rule of 401(k) investing is to contribute at least enough to capture the full match — anything less is leaving guaranteed money on the table.
Traditional vs Roth
Traditional 401(k) contributions are made pre-tax: they lower your taxable income now, and you pay tax on withdrawals in retirement. Roth 401(k) contributions are made after-tax: no deduction today, but qualified withdrawals — including all growth — are completely tax-free. The rule of thumb is that if you expect to be in a higher tax bracket in retirement than you are now (common for younger workers early in their careers), the Roth wins; if you are a high earner today expecting lower income later, traditional usually wins.
2025 contribution limits
For 2025 the employee contribution limit is $23,500, with an additional $7,500 catch-up contribution allowed from age 50. The combined employer-plus-employee limit is $70,000. Roth and traditional contributions share the same $23,500 employee cap — it is a combined limit, not separate. Maxing the account every year is the fast track to a large balance, but capturing the match and then layering in an IRA is the right order for most people who cannot max everything.
Why starting early matters so much
Compound growth rewards time more than amount. At a 7% annual return, money roughly doubles every decade. A 25-year-old contributing for ten years and then stopping can end up with more at 65 than a 35-year-old who contributes steadily for thirty years — because the early dollars compound through more doubling cycles. This is the core reason financial planners stress starting as young as possible, even with small amounts.
The 4% rule and what the balance means
A widely used retirement guideline is the 4% rule: you can withdraw about 4% of your balance in the first year of retirement, adjust for inflation thereafter, and the portfolio should last roughly 30 years. A $1,000,000 balance translates to about $40,000 a year, or $3,333 a month, of inflation-adjusted income. Viewing your projected balance through this lens turns an abstract number into a concrete monthly retirement income — and often reveals whether your current contribution rate is on track.