401(k) Contribution Calculator
Maximize your retirement savings! Discover how your contributions, employer match, and compound interest work together to build a secure future.
Interactive 401(k) Calculator
See the power of compound interest instantly
Personal Details
Contributions
Assumptions
Projected Balance at Age 65
$1,680,626
Total Annual Contribution (Year 1)
$7,800
# How to Use This Calculator
A 401(k) is one of the most powerful tools for building wealth in the United States. It allows you to save for retirement on a tax-deferred basis, meaning you don't pay taxes on the money until you withdraw it in retirement.
Calculator Inputs Explained:
- SalaryYour gross annual income before taxes.
- Contribution %The percentage of your salary you save. Financial experts recommend aiming for 10-15%.
- Employer MatchFree money! Most employers match 50% or 100% of your contributions up to a certain limit (e.g., 3-6%).
- Return RateThe annual growth of your investments. The S&P 500 historical average is roughly 7-10% adjusted for inflation.
💡 Pro Tip: The "Match" Rule
Always contribute at least enough to get your full Employer Match. If your company matches 100% of the first 4%, and you don't contribute, you are effectively taking a 4% pay cut. It is the only guaranteed 100% return on investment you will ever find.
🏛️ 2024 & 2025 Contribution Limits
The IRS sets limits on how much you can contribute to your 401(k) each year. These limits typically increase with inflation.
| Limit Type | 2024 Limit | 2025 Limit | Explanation |
|---|---|---|---|
| Employee Contribution | $23,000 | $23,500 | The max amount you can deduct from your paycheck. |
| Catch-Up Contribution | $7,500 | $7,500 | Extra allowed for those aged 50 or older. |
| Total Combined Limit | $69,000 | $70,000 | Employee + Employer Match + After-tax contributions. |
Real-World Case Studies
The Early Bird (Starting at 25)
Alex starts contributing $5,000/year (10% of salary) at age 25. Even with a modest salary, the 40-year time horizon allows compound interest to do the heavy lifting.
Total Invested
$200,000
Final Balance (Age 65)
$1,240,000
Growth Multiplier
Every $1 invested became $6
The Late Starter (Starting at 40)
John waits until age 40. Even though he earns more ($80k) and contributes roughly the same amount annually ($4,000), he misses out on 15 years of compounding.
Total Invested
$160,000
Final Balance (Age 65)
$450,000
Growth Multiplier
Less time for compound interest
Frequently Asked Questions
Q. Can I withdraw my money early?
Generally, no. If you withdraw before age 59½, you will typically pay ordinary income taxes plus a 10% early withdrawal penalty. There are exceptions for specific hardships or buying a first home, but it is best to leave the money growing.
Q. What happens if I leave my job?
Your money is yours. You have four main options: 1. Leave it in the old employer's plan (if allowed). 2. Roll it over to your new employer's 401(k). 3. Roll it over into an IRA (Individual Retirement Account). 4. Cash it out (Not recommended due to taxes and penalties).
Q. What is "Vesting"?
Vesting refers to ownership. You always own 100% of the money you contribute. However, the employer match money often "vests" over time (e.g., 20% per year). If you leave after 2 years, you might only keep 40% of the employer's match.
Disclaimer: This calculator and guide are for educational purposes only and do not constitute financial advice. 401(k) investment returns vary based on market performance. Contribution limits are subject to IRS changes. Please consult a qualified financial advisor or tax professional for your specific situation.