401(k) Calculator
Project your 401(k) balance at retirement with employer match, salary growth, and compounding returns. Includes 2026 contribution limits.
Balance at age 65
| Age | Balance | Annual contribution | Annual match |
|---|---|---|---|
| Age 40 | $211,726 | $9,786 | $2,936 |
| Age 50 | $634,948 | $13,151 | $3,945 |
| Age 60 | $1,542,617 | $17,674 | $5,302 |
| Age 65 | $2,317,610 | $20,489 | $6,147 |
Why 401(k)s are powerful
A 401(k) is the most tax-efficient retirement vehicle most US workers have access to. It combines three financial superpowers: tax-deferred growth, employer match (essentially a guaranteed return), and automatic contributions (which removes the temptation to spend instead of save).
Even modest contributions compound dramatically over decades. $500/month from age 25 to 65 at 7% annual return = ~$1.3M. The same $500/month started at age 35 ends at ~$610K — less than half. Time matters more than amount.
2026 contribution limits
- Employee deferral limit: $23,500
- Catch-up contribution (age 50+): additional $7,500 (total $31,000)
- Total annual contribution (employee + employer): $70,000 (or $77,500 with catch-up)
- Highly compensated employee (HCE) threshold: $160,000 in prior-year compensation
The numbers adjust most years for inflation. Catch-up contributions are designed for people behind on retirement savings as they approach 50.
The employer match — never leave it on the table
If your employer matches 50% up to 6% of salary, contributing less than 6% means walking away from free money. On a $80,000 salary, that's up to $2,400/year unmatched — plus decades of compounding growth on top.
Vesting schedules: some employers require you to stay several years before the match fully vests (becomes yours). Common schedules: immediate (you own it from day one), graded (e.g., 20% per year for 5 years), or cliff vesting (0% until year 3, then 100%). Check your plan documents — switching jobs before vesting forfeits the match.
Traditional vs Roth 401(k)
Two flavors, different tax treatments:
- Traditional: contributions are pre-tax (reduces current taxable income), grows tax-free, withdrawals taxed as ordinary income. Best when you expect lower taxes in retirement than now.
- Roth: contributions are post-tax, grows tax-free, withdrawals tax-free. Best when you expect higher taxes in retirement than now (younger workers, expecting career growth, or worried about future tax hikes).
- Tax diversification: many advisers suggest splitting between traditional and Roth so you have flexibility in retirement. You don't know what tax rates will look like in 30 years.
The 4% rule for retirement spending
The Trinity Study (1998) and follow-ups found that withdrawing 4% of your portfolio in year 1, then adjusting for inflation each subsequent year, had a high probability (95%+) of not running out of money over 30 years for typical balanced portfolios.
Quick math: a $1.25M portfolio supports ~$50K/year. To replace $80K/year of pre-retirement income, you need ~$2M. Adjust by 25× your desired annual spending — that's your retirement target.
Caveats: the 4% rule assumes 30-year retirements. Earlier retirees (FIRE crowd) often use 3–3.5%. Higher real return environments can support more; bond-heavy portfolios in low-rate environments may need less.
Common 401(k) mistakes
- Not contributing up to the match. Always cover at least the match cap.
- Investing in your employer's stock as the primary holding. Concentration risk — if the company fails, you lose your job AND your savings.
- High-fee fund choices. Older 401(k) plans sometimes have terrible fund options (1%+ expense ratios). Pick the lowest-cost index fund available, often a target-date fund.
- Borrowing from the 401(k). 401(k) loans seem cheap but interrupt compounding and can become taxable+penalty if you change jobs and can't repay quickly.
- Cashing out when changing jobs. 10% penalty + ordinary income tax. Roll over to an IRA or new 401(k) instead.
- Not increasing contributions with raises. Lifestyle creep eats raises. Set automatic 1%/year contribution increases.
401(k) vs IRA — which to prioritize
Suggested priority order for most people:
- Contribute to 401(k) up to the employer match (instant return).
- Max out an HSA if you have access (triple tax advantage for medical expenses).
- Max out a Roth IRA ($7,000/year, $8,000 if 50+) — better fund choices than most 401(k)s, more flexibility.
- Go back and max out the 401(k) up to the $23,500 limit.
- If still saving more: taxable brokerage account or backdoor Roth strategies.
Stress-test the projection
The calculator's output is a single point estimate. Real markets are volatile. Try running scenarios at 5%, 7%, and 9% returns to see the spread. Plans that work at 5% real are robust; plans that only work at 10%+ are fragile.
Pair this with our Investment Calculator for general portfolio projection and the Paycheck Calculator to see how 401(k) contributions affect your take-home pay (the cost is less than the contribution amount because of tax savings).