401(k) Calculator

401(k) growth formula used here

A 401(k) balance grows from three pieces: your current balance, employee deferrals, and employer match. Each contribution is added over time and compounded by the assumed return. Employer match is usually limited by a percentage of pay and a match formula, such as 50% of contributions up to 6% of salary. The calculator keeps those pieces visible because a higher deferral rate may unlock match dollars before it meaningfully changes your take-home pay.

Worked example

If salary is $90,000, an employee defers 8%, and the employer matches 50% up to 6%, the employee contributes $7,200 per year and the employer adds $2,700. With a $40,000 starting balance and 6.5% assumed annual growth over 25 years, the match alone can represent a six-figure difference by retirement. This is why it is worth testing the exact match formula instead of using a rough retirement rule of thumb.

Edge cases and practical tips

• Annual IRS contribution limits can cap high deferral rates; check the current year limit before relying on the projection.
• If your employer has a vesting schedule, matched dollars may not be fully yours immediately.
• Salary growth changes both contributions and match, so rerun the estimate after raises or job changes.