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401k Calculator

Project your 401(k) growth and see if you are on track for retirement.

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Maximize Your Retirement Savings with a 401(k)

Our 401(k) Calculator helps you project your retirement savings growth, understand the impact of employer matching, and estimate the cost of an early withdrawal.

What is a 401(k)?

A 401(k) is an employer-sponsored retirement savings plan that offers significant tax advantages. You contribute a portion of your paycheck, often before taxes are taken out (Traditional 401(k)), which lowers your taxable income for the year. The money grows tax-deferred until you withdraw it in retirement. Many employers also offer a "match," where they contribute a certain amount to your account based on your own contributions, effectively giving you a 100% return on that money instantly.

How the Calculator Works

Our calculator uses three distinct tools to help you manage your 401(k):

  1. 401(k) Growth Calculator: This tool uses the compound interest formula to project your balance at retirement. It factors in your current balance, contributions, employer match, and expected annual return.
  2. Early Withdrawal Calculator: This tool calculates the financial impact of taking money out before retirement age, estimating the 10% penalty and federal/state income taxes you would owe.
  3. Maximize Match Calculator: This tool helps you understand complex, tiered employer matching policies to determine the exact percentage you need to contribute to get the full match.

Interpreting Your 401(k) Projection

The main result of the growth calculator is your **Balance at Retirement**. This figure shows the total estimated value of your 401(k) when you plan to stop working. The summary breakdown is equally important, as it shows how much of that final balance came from your initial savings, your contributions, your employer's contributions, and the growth (interest) itself. For most long-term savers, the interest and employer match will make up a very large portion of the final nest egg, highlighting their importance.

Common 401(k) Myths

  1. Myth 1: My 401(k) is automatically invested. False. While some plans may have a default investment, you are responsible for choosing how your money is invested from the funds available in your plan.
  2. Myth 2: I can't contribute to an IRA if I have a 401(k). You can absolutely contribute to both. While the tax-deductibility of a Traditional IRA may be limited by your income, a Roth IRA is often an excellent complement to a 401(k).
  3. Myth 3: I should take a 401(k) loan for a down payment. While possible, taking a loan from your 401(k) should be a last resort. It can stunt your investment growth, and if you leave your job, you may be required to repay it immediately.

Frequently Asked Questions

How does a 401(k) calculator work?

A 401(k) calculator projects the future value of your account by using the compound interest formula. It considers your current balance, your annual contributions, your employer's match, and your expected rate of return over the number of years until you retire.

How much should I contribute to my 401(k)?

At a minimum, you should contribute enough to get your full employer match, as this is essentially free money. Many financial advisors recommend saving at least 15% of your pre-tax income for retirement, including the employer match.

What is the maximum 401(k) contribution for 2024?

For 2024, the maximum employee contribution to a 401(k) is $23,000. If you are age 50 or over, you can make an additional catch-up contribution of $7,500, for a total of $30,500.

What happens if I take an early withdrawal from my 401(k)?

If you withdraw money from your 401(k) before age 59½, you will typically have to pay both ordinary income tax on the amount withdrawn and a 10% early withdrawal penalty. Our Early Withdrawal calculator can help you estimate this cost.

Tips for a Healthy 401(k)

  • Always Get the Full Match: Not contributing enough to get your full employer match is like turning down a 100% return on your money. Make this your top priority.
  • Increase Your Contribution Rate by 1% Each Year: This small, painless increase can add up to tens of thousands of dollars over your career.
  • Choose Low-Cost Index Funds: In your plan's fund lineup, favor broad-market index funds with low expense ratios to keep more of your returns.
  • Don't Panic During Market Downturns: Retirement saving is a long-term game. Avoid emotional decisions to sell when the market is down; instead, see it as an opportunity to buy more shares at a lower price.

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