How to use the 401k Calculator
- Enter your current salary and the percentage of it you contribute each year.
- Enter your employer's match rate and the percentage-of-salary cap it applies to.
- Set an expected annual return and the number of years until you retire.
- Compare the projected balance with and without the match to see what the match alone is worth.
How the calculation works
Contributions are treated as an annual amount growing at the assumed return until retirement, so the balance is the future value of a growing stream of deposits. An employer match is simply additional contribution, but because it arrives at the same time as your own it compounds for the same period — which is why declining a match is expensive far beyond the cash amount.
Two assumptions dominate the output. The return rate compounds over decades, so a one-point difference changes the result substantially; and salary growth, if you model it, raises later contributions. Statutory annual contribution limits also cap what can be paid in, and those limits are revised most years.
Balance = Σ (annual contribution + employer match) × (1 + r)^(years remaining)Source: Future-value-of-an-annuity method. Annual deferral limits are set by the IRS and change most years.
Worked example
Salary 78,000, contributing 8%, employer matches 50% up to 6% of salary, 6.5% return, 27 years to retirement.
- Your contribution = 78,000 × 8% = 6,240 per year.
- Match = 50% of the first 6% of salary = 0.5 × 4,680 = 2,340 per year.
- Total annual contribution = 8,580.
- Future value = 8,580 × ((1.065^27 − 1) / 0.065) ≈ 8,580 × 68.6.
Projected balance ≈ 588,000, of which about 160,000 comes from employer match and its growth.
Frequently asked questions
Should I contribute more than the match threshold?+
Capture the full match first — it is an immediate return no market can promise. Beyond that, extra 401(k) contributions still get tax-deferred growth, but compare them against clearing high-interest debt.
What return rate should I assume?+
A diversified long-horizon portfolio is often modelled at 6 to 7% nominal. Use a lower figure if you are close to retirement or heavily in bonds, and run the projection twice to see how sensitive it is.
Are the contribution limits built into the projection?+
Statutory deferral limits change annually, so confirm the current year's limit with the IRS before relying on a high contribution figure. VERIFY the applicable limit for your tax year.
What about tax when I withdraw?+
Traditional 401(k) withdrawals are taxed as ordinary income, so the projected balance is pre-tax. A Roth account is funded with taxed money and withdrawn tax-free, which makes the same balance worth more in retirement.
Last reviewed August 31, 2026. We review this page whenever the underlying formula, tax year, published rate or standard changes.