401(k) Calculator: Retirement Savings and Growth Estimator
Plan your retirement with our 401(k) calculator. See how employer matching, contribution rates, and investment returns affect your retirement savings over time.
Category: Financial
Your Information
Contribution Settings
$3,600 per year
Maximum salary percentage your employer will match
Frequently Asked Questions
What is a 401(k) plan?
A 401(k) is an employer-sponsored retirement savings plan that allows employees to contribute a portion of their wages on a pre-tax basis. Many employers offer matching contributions up to a certain percentage, effectively providing free money toward your retirement. The funds grow tax-deferred until withdrawal during retirement, typically starting at age 59½.
How much should I contribute to my 401(k)?
Financial advisors generally recommend contributing at least enough to get your employer's full matching contribution—that's essentially free money. Beyond that, aim to save 10-15% of your income for retirement through your 401(k) and other retirement accounts. The maximum annual contribution limit is updated yearly by the IRS ($22,500 for 2023, with an additional $7,500 catch-up contribution allowed for those 50 and older).
What is the difference between a traditional and Roth 401(k)?
With a traditional 401(k), contributions are made pre-tax, reducing your current taxable income. The money grows tax-deferred, but withdrawals in retirement are taxed as ordinary income. With a Roth 401(k), contributions are made with after-tax dollars (no immediate tax benefit), but qualified withdrawals in retirement are completely tax-free, including all earnings.
What happens to my 401(k) if I change jobs?
When changing jobs, you typically have four options for your 401(k): 1) Leave it with your former employer if allowed, 2) Roll it over to your new employer's plan if permitted, 3) Roll it over to an Individual Retirement Account (IRA), or 4) Cash it out (generally not recommended due to taxes and potential penalties). The best choice depends on your specific situation, investment options, and fees.
When can I withdraw from my 401(k) without penalties?
You can typically withdraw from your 401(k) without penalties starting at age 59½. Withdrawals before this age usually incur a 10% early withdrawal penalty plus income taxes, with some exceptions like certain hardship withdrawals or if you leave your job at age 55 or later. At age 73 (as of 2023 rules), Required Minimum Distributions (RMDs) begin, requiring you to withdraw a minimum amount annually.