Project how much your 401(k) will grow by retirement. Enter your salary, contribution rate, and employer match details — the calculator models year-by-year growth including annual raises, IRS contribution limits, and compound investment returns.
Pro tip: At minimum, contribute enough to get your full employer match — it’s a 50–100% instant return on your money. Not contributing up to the match is literally leaving free salary on the table.
See how increasing your contribution rate changes your retirement balance.
| Year | Age | Salary | Your Contrib | Employer Match | Growth | Balance |
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How a 401(k) Works
A 401(k) is an employer-sponsored retirement savings plan that lets you contribute a portion of your paycheck before taxes are deducted. Your contributions lower your taxable income in the year they are made, and all investment gains grow tax-deferred until you withdraw them in retirement. For example, if you earn $75,000 and contribute 10%, your taxable income drops to $67,500 — saving you hundreds or thousands in taxes each year. The money in your account can be invested in a range of options including stock index funds, bond funds, and target-date funds. Withdrawals before age 59½ generally incur a 10% early withdrawal penalty plus ordinary income tax, so a 401(k) is designed as a long-term vehicle. Required minimum distributions begin at age 73 under current rules, ensuring the government eventually collects the deferred taxes.
Understanding Employer Matching
One of the most valuable features of a 401(k) is the employer match. A common formula is a dollar-for-dollar match up to 6% of your salary — meaning if you contribute 6%, your employer adds another 6%, effectively doubling that portion of your contribution. Some employers use a partial match (e.g., 50 cents per dollar up to 6%), which still represents a guaranteed 50% return before any market gains. Be aware of vesting schedules: some companies require you to work a certain number of years before their matching contributions fully belong to you. Cliff vesting gives you 0% until a set date, then 100%. Graded vesting increases your ownership gradually, often over three to six years. Always check your plan documents so you know exactly when those matching dollars become yours to keep.
How Much Should You Contribute to Your 401(k)?
Financial planners often recommend saving 10–15% of your gross income for retirement, including any employer match. At the very least, contribute enough to capture the full employer match — anything less is leaving guaranteed money on the table. If you can afford to go further, maximizing your contribution to the IRS limit supercharges your tax-deferred growth. Increasing your contribution rate by even 1–2% per year — especially when timed with annual raises — can add hundreds of thousands of dollars to your balance by retirement without noticeably changing your take-home pay. The earlier you start, the more powerful each percentage point becomes, because compound returns have more years to multiply. Use the contribution impact comparison above to see the difference between contributing 6%, 10%, and 15% with your specific salary and timeline.
401(k) Contribution Limits
The IRS sets annual limits on how much you can contribute. For 2024 and 2025, the employee elective deferral limit is $23,500. If you are age 50 or older, you can make an additional $7,500 in catch-up contributions, bringing your total employee limit to $31,000. These limits apply to your contributions only — employer matching contributions do not count toward your personal cap, though there is a combined cap (employee plus employer) of $70,500 for those 50 and older. Keep in mind that these limits are adjusted periodically for inflation, so they may increase in future years. If you have access to both a traditional and a Roth 401(k), the combined contributions across both accounts share the same annual limit.
Roth 401(k) vs Traditional 401(k)
A traditional 401(k) uses pre-tax dollars: you get a tax break today but pay income tax on withdrawals in retirement. A Roth 401(k) uses after-tax dollars: you pay taxes now, but qualified withdrawals in retirement are completely tax-free. Which is better depends on whether you expect your tax rate to be higher or lower in retirement. If you are early in your career with a relatively modest salary and expect to earn more later, the Roth option can be compelling because you lock in today’s lower tax rate. If you are in your peak earning years and expect to drop into a lower tax bracket in retirement, the traditional pre-tax approach typically saves more. Many advisors suggest splitting contributions between both types for tax diversification, giving you flexibility to manage your tax liability in retirement by choosing which account to draw from each year.
The Power of Starting Early
Compound growth rewards patience more than almost any other variable. Consider two hypothetical savers: Taylor starts contributing $500 per month at age 25 and stops at 35, investing for just 10 years. Morgan waits until age 35 and contributes $500 per month all the way to 65 — investing for 30 years. Assuming a 7% average annual return, Taylor ends up with approximately $602,000 at age 65 while Morgan accumulates about $567,000. Taylor invested only $60,000 total; Morgan invested $180,000. The difference is time: Taylor’s early contributions had decades to compound, and each year of growth built on the previous year’s gains. Starting just five years earlier can mean hundreds of thousands more at retirement. Every year you delay costs more than the last, because you lose not just that year’s contributions but all the compounding those contributions would have generated.
Looking for related tools? Try our Compound Interest Calculator to model general investment growth, or our Inflation Calculator to understand purchasing power over time. Explore all Personal Finance tools.