Rate of Return 401k Calculator

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401(k) Personal Rate of Return Calculator

Your Performance Summary:

Total Gain/Loss:
Total Percentage Return:
Annualized Rate of Return (CAGR):
function calculateROR() { var start = parseFloat(document.getElementById('startBalance').value); var end = parseFloat(document.getElementById('endBalance').value); var contrib = parseFloat(document.getElementById('totalContributions').value) || 0; var years = parseFloat(document.getElementById('yearsCount').value); if (isNaN(start) || isNaN(end) || isNaN(years) || years <= 0) { alert("Please enter valid numbers for balances and a time period greater than zero."); return; } // Simple Gain/Loss calculation // Total Profit = Ending Balance – Starting Balance – Total Contributions var gainLoss = end – start – contrib; // Total Return % = (Gain / (Start + Contributions)) * 100 // Note: This is a simplified personal ROR formula. // Truly accurate ROR requires Time-Weighted or Money-Weighted logic (XIRR), // but for a general web tool, the net gain over cost basis is the standard approach. var costBasis = start + contrib; var totalPct = (gainLoss / costBasis) * 100; // Annualized Return (Compound Annual Growth Rate) // CAGR = [(Ending Value / Beginning Value) ^ (1 / years)] – 1 var annualized = (Math.pow((end / costBasis), (1 / years)) – 1) * 100; document.getElementById('totalGain').innerText = "$" + gainLoss.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('totalPercent').innerText = totalPct.toFixed(2) + "%"; document.getElementById('annualizedRate').innerText = annualized.toFixed(2) + "%"; document.getElementById('ror-result-area').style.display = 'block'; }

Understanding Your 401(k) Rate of Return

Calculating the performance of your 401(k) is more complex than a standard stock investment because you are constantly adding funds through payroll deductions. This calculator helps you determine your Personal Rate of Return, taking into account your starting balance and your total contributions over a specific period.

The Importance of Annualized Returns

While seeing a total 20% gain is exciting, it matters significantly whether that gain happened over 2 years or 10 years. Our calculator provides the Annualized Rate of Return (often referred to as the Compound Annual Growth Rate or CAGR). This metric levels the playing field, allowing you to compare your 401(k) performance against benchmarks like the S&P 500 or other retirement accounts.

How to Use This Calculator

  • Starting Balance: Look at your 401(k) statement from the beginning of the period you want to analyze (e.g., January 1st of last year).
  • Ending Balance: Your current account balance or the balance at the end of your chosen period.
  • Total Contributions: Sum up all deposits made during this time. Remember to include your Employer Match, as this is part of your total investment cost basis.
  • Time Period: The number of years between your start and end dates.

Example Calculation

Imagine you started 3 years ago with $10,000. Over those 3 years, you and your employer contributed a total of $5,000. Your balance today is $18,000.

  • Total Cost Basis: $10,000 (start) + $5,000 (contributions) = $15,000
  • Total Gain: $18,000 – $15,000 = $3,000
  • Total Return: ($3,000 / $15,000) = 20%
  • Annualized Return: In this case, your annualized return would be approximately 6.27% per year.

What is a "Good" 401(k) Return?

A "good" return depends heavily on your asset allocation. Historically, a portfolio heavily weighted toward stocks may aim for 7% to 10% annually over long periods. However, if you are closer to retirement and hold more bonds or stable value funds, a return of 3% to 5% might be expected and appropriate for your risk level.

Pro Tip: Most 401(k) providers (like Fidelity or Vanguard) provide a "Personal Rate of Return" on their dashboard. Use this calculator to verify those numbers or to track performance across custom timeframes that your provider might not show.

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