Calculate your 401(k) retirement savings with employer matching and compound growth
2024 limit: $23,000 ($30,500 if 50+)
Example: 50% match up to 6% means employer contributes 3% if you contribute 6%
Historical S&P 500 average: ~10%
Projected Balance at 65
$1,657,024.52
in 35 years
Your Contributions
$224,975.15
Employer Match
$112,487.57
Investment Growth
$1,269,561.8
From compound interest
A 401(k) is an employer-sponsored retirement savings plan that offers significant tax advantages. Named after section 401(k) of the Internal Revenue Code, these plans allow you to save for retirement while reducing your current taxable income.
| Feature | Traditional 401(k) | Roth 401(k) |
|---|---|---|
| Contributions | Pre-tax (reduces current income) | After-tax (no current deduction) |
| Growth | Tax-deferred | Tax-free |
| Withdrawals | Taxed as ordinary income | Tax-free (if qualified) |
| RMDs | Required at age 73 | Required at age 73 |
| Best For | Higher tax bracket now | Lower tax bracket now |
Pro Tip:Always contribute enough to get the full employer match—it's an immediate 50-100% return on your investment. If your employer matches 50% up to 6%, contribute at least 6% to get the full 3% match.
Contribute at least enough to receive the full employer match. Not doing so is leaving free money on the table—an instant 50-100% return.
Raise your contribution rate by 1% each year or with each raise. You won't miss the money, but it makes a huge difference over decades.
Time is your greatest asset. Starting at 25 vs 35 can mean hundreds of thousands more at retirement due to compound growth.
High fees eat returns. Choose index funds with expense ratios under 0.20%. A 1% fee difference can cost $100,000+ over a career.
Avoid early withdrawals. You'll pay taxes, 10% penalty, and lose decades of compound growth. Borrow from other sources first.
Review and rebalance your portfolio once a year to maintain your target asset allocation and risk level as you age.
At minimum, contribute enough to get the full employer match. Ideally, aim for 15-20% of your income including the match. If you can't afford that, start with 6% and increase 1% annually.
You have four options: leave it with your old employer, roll it into your new employer's 401(k), roll it into an IRA, or cash out (not recommended due to taxes and penalties). Most people roll over to an IRA for more investment options.
Age 59½ is the standard age for penalty-free withdrawals. Early withdrawals face a 10% penalty plus income taxes. Exceptions include disability, certain medical expenses, or first-time home purchase (up to $10,000).
If you expect to be in a higher tax bracket in retirement, choose Roth. If you expect lower taxes in retirement, choose Traditional. Many people do a mix. Traditional gives immediate tax savings, while Roth provides tax-free retirement income.
Many plans allow loans up to $50,000 or 50% of your vested balance. You pay yourself back with interest, but you lose potential investment growth. If you leave your job, the loan must be repaid quickly or it's treated as a taxable withdrawal.
Starting at age 73, you must withdraw a minimum amount from your 401(k) each year based on IRS life expectancy tables. Failure to take RMDs results in a 25% penalty on the amount not withdrawn.