A 401(k) is a powerful, employer-sponsored retirement savings plan that allows employees to contribute a portion of their pre-tax salary to an investment account. These contributions, along with any employer matching funds, grow tax-deferred until retirement, making it one of the most effective ways to save for your future.
How the 401(k) Calculator Works
Our 401(k) calculator helps you project the potential growth of your retirement savings. By inputting your current balance, annual salary, contribution rates, and expected investment growth, you can visualize how compound interest and employer matching can significantly boost your nest egg over time.
Current 401(k) Balance: The amount you currently have saved in your 401(k) account.
Current Annual Salary: Your gross annual income. This is used to calculate your contributions and employer match.
Your Annual Contribution Rate (%): The percentage of your salary you contribute to your 401(k) each year.
Employer Match Percentage (%): The percentage your employer matches of your contributions (e.g., 50% means they contribute $0.50 for every $1 you contribute).
Employer Match Cap (% of Salary): The maximum percentage of your salary that your employer will match (e.g., 6% means they won't match contributions beyond 6% of your salary).
Annual Investment Growth Rate (%): The average annual return you expect on your investments. This is a crucial factor for long-term growth.
Years Until Retirement: The number of years you plan to continue contributing to your 401(k) before retirement.
Annual Salary Increase Rate (%): An optional input to account for potential salary raises over time, which will increase your contribution amounts.
The Power of Compound Interest and Employer Match
The two biggest drivers of 401(k) growth are compound interest and employer matching. Compound interest means your earnings also earn returns, creating an exponential growth effect over decades. Employer matching is essentially "free money" that significantly boosts your savings without requiring additional contributions from your paycheck. Maximizing your employer match is often considered one of the smartest financial moves you can make.
Use this calculator to experiment with different scenarios. See how increasing your contribution rate by just a few percentage points, or ensuring you get the full employer match, can make a substantial difference in your retirement readiness.
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function calculate401k() {
var currentBalance = parseFloat(document.getElementById("currentBalance").value);
var annualSalary = parseFloat(document.getElementById("annualSalary").value);
var yourContributionRate = parseFloat(document.getElementById("yourContributionRate").value);
var employerMatchRate = parseFloat(document.getElementById("employerMatchRate").value);
var employerMatchCapPercent = parseFloat(document.getElementById("employerMatchCapPercent").value);
var annualGrowthRate = parseFloat(document.getElementById("annualGrowthRate").value);
var yearsToRetirement = parseInt(document.getElementById("yearsToRetirement").value);
var salaryIncreaseRate = parseFloat(document.getElementById("salaryIncreaseRate").value);
// Input validation
if (isNaN(currentBalance) || currentBalance < 0 ||
isNaN(annualSalary) || annualSalary < 0 ||
isNaN(yourContributionRate) || yourContributionRate 100 ||
isNaN(employerMatchRate) || employerMatchRate 100 ||
isNaN(employerMatchCapPercent) || employerMatchCapPercent 100 ||
isNaN(annualGrowthRate) || annualGrowthRate < 0 ||
isNaN(yearsToRetirement) || yearsToRetirement < 0 ||
isNaN(salaryIncreaseRate) || salaryIncreaseRate < 0) {
document.getElementById("result").innerHTML = "Please enter valid positive numbers for all fields. Contribution and Match rates should be between 0 and 100.";
return;
}
// Convert percentages to decimals
var yourContributionRateDecimal = yourContributionRate / 100;
var employerMatchRateDecimal = employerMatchRate / 100;
var employerMatchCapPercentDecimal = employerMatchCapPercent / 100;
var annualGrowthRateDecimal = annualGrowthRate / 100;
var salaryIncreaseRateDecimal = salaryIncreaseRate / 100;
var projectedBalance = currentBalance;
var totalYourContributions = 0;
var totalEmployerContributions = 0;
var currentAnnualSalary = annualSalary; // Use a variable for salary that increases over time
for (var i = 0; i < yearsToRetirement; i++) {
// Calculate your annual contribution for the current year
var yourAnnualContribution = currentAnnualSalary * yourContributionRateDecimal;
totalYourContributions += yourAnnualContribution;
// Calculate employer match
var employerMatchBasedOnYourContribution = yourAnnualContribution * employerMatchRateDecimal;
var employerMatchCapAmount = currentAnnualSalary * employerMatchCapPercentDecimal;
var actualEmployerMatch = Math.min(employerMatchBasedOnYourContribution, employerMatchCapAmount);
totalEmployerContributions += actualEmployerMatch;
var totalAnnualContributions = yourAnnualContribution + actualEmployerMatch;
// Add contributions to the balance before growth
var balanceBeforeGrowth = projectedBalance + totalAnnualContributions;
// Calculate investment growth for the year
var investmentGain = balanceBeforeGrowth * annualGrowthRateDecimal;
// Update projected balance
projectedBalance = balanceBeforeGrowth + investmentGain;
// Increase salary for the next year
currentAnnualSalary *= (1 + salaryIncreaseRateDecimal);
}
var totalContributions = totalYourContributions + totalEmployerContributions;
var totalInvestmentGrowth = projectedBalance – currentBalance – totalContributions;
var resultHTML = "