401k Calculator

Project your 401k retirement savings including employer match. See how your contributions, employer matching, and investment growth combine over time to build your retirement nest egg.

How a 401k Works

A 401k is an employer-sponsored retirement savings plan that lets you contribute a portion of your pre-tax salary to a tax-deferred investment account. Contributions reduce your taxable income in the year they are made, and your investments grow tax-free until you withdraw them in retirement.

The name comes from Section 401(k) of the Internal Revenue Code. Most private-sector employers in the US offer some form of 401k plan, making it the primary retirement savings vehicle for millions of Americans.

Employer Match Explained

Many employers match a portion of your 401k contributions — this is essentially free money added to your retirement savings. A common match formula is 50% of your contributions up to 6% of your salary, which effectively means your employer contributes 3% of your salary when you contribute at least 6%.

Some employers offer a dollar-for-dollar match up to a certain percentage. For example, a 100% match on the first 3% of salary means if you earn $75,000 and contribute 3% ($2,250), your employer also contributes $2,250. Not contributing enough to get the full match is leaving compensation on the table.

This calculator models a simple percentage-of-salary employer contribution. In practice, match formulas vary — check your plan documents for the exact terms.

2024 Contribution Limits

For 2024, the IRS allows employees under 50 to contribute up to $23,000 to their 401k. If you are 50 or older, you can make an additional catch-up contribution of $7,500, bringing the total to $30,500. These limits apply to employee contributions only — employer matching contributions do not count toward this cap.

The combined limit for employee and employer contributions is $69,000 for 2024 ($76,500 with catch-up contributions). Contribution limits are adjusted annually for inflation, so they tend to increase over time.

Vesting Schedules

While your own contributions are always 100% yours, employer contributions may be subject to a vesting schedule. Vesting determines how much of the employer match you get to keep if you leave the company before a certain period.

Common vesting schedules include cliff vesting (0% until a specific date, then 100%) and graded vesting (increasing percentage over several years, typically reaching 100% after 3-6 years). Understanding your vesting schedule is important when evaluating job changes.

This calculator assumes all employer contributions are fully vested. If your plan has a vesting schedule and you may leave before being fully vested, your actual employer contribution benefit could be lower.

Tax Advantages

Traditional 401k contributions are made with pre-tax dollars, reducing your taxable income today. If you earn $75,000 and contribute 6% ($4,500), your taxable income drops to $70,500. At a 22% marginal tax rate, that saves you $990 in federal income tax for the year.

Investments inside the 401k grow tax-deferred — you pay no tax on dividends, interest, or capital gains while the money remains in the account. You pay ordinary income tax on withdrawals in retirement, when many people are in a lower tax bracket.

Some employers also offer a Roth 401k option, where contributions are made with after-tax dollars but qualified withdrawals in retirement are completely tax-free. For a comparison of tax-free retirement accounts, see our Roth IRA Calculator. To model whether your savings will last through retirement, try the Retirement Calculator.