401(k) Calculator

At minimum, contribute enough to get your full employer match—that's free money (typically 3-6% of salary). Ideally, aim for 10-15% of gross income including the match. The 2024 contribution limit is $23,000 ($30,500 if 50+). If you can't hit 15%, start with the match and increase by 1% annually until you reach your goal.

An employer match is when your company contributes to your 401(k) based on your contributions. A common formula is '50% match up to 6%'—meaning if you contribute 6% of your salary, your employer adds 3%. This is essentially a 50% instant return on your contribution. Always contribute at least enough to get the full match.

Traditional 401(k): Contribute pre-tax, pay taxes on withdrawals in retirement. Best if your tax rate is higher now than in retirement. Roth 401(k): Contribute after-tax, withdraw tax-free in retirement. Best if your tax rate will be higher later. Many experts suggest splitting contributions or choosing Roth while younger and in lower tax brackets.

Generally at age 59½. Early withdrawals face a 10% penalty plus income taxes. Exceptions include: disability, certain medical expenses, qualified domestic relations orders, and the Rule of 55 (leaving job at 55+ to access that employer's plan). Loans from your 401(k) are possible but not recommended as they reduce growth.

Use the compound growth formula: FV = PMT × [((1+r)^n - 1) / r]. Example: Contributing $500/month for 30 years at 7% annual return grows to about $567,000. Variables that matter most: how early you start (time beats amount), contribution rate, and investment returns. Starting at 25 vs 35 can mean double the retirement balance.