401(k) Retirement Calculator
Calculate your future retirement savings including employer matching
Calculator Parameters
Total annual employee savings.
Percentage of employee contribution matched.
Projected Total Value
—
(at retirement)
| Your Contributions | — |
|---|---|
| Employer Match | — |
| Interest Earned | — |
Your Contrib.
Employer Match
Interest
Note: Calculation assumes annuity due (contributions at start of period) and constant annual returns.
Contents
Understanding Your 401(k) Growth
The Power of the Employer Match
The employer match is often referred to as “free money”. If an employer offers a 50% match on contributions, the employee effectively earns an immediate 50% return on investment before market exposure. Financial advisors typically recommend contributing at least enough to obtain the full employer match.
How Compound Interest Works
This tool calculates future value using compound interest. Interest is earned on:
- Principal: The initial balance grows independently.
- Contributions: Annual additions (plus match) accumulate interest over time.
Real-World Considerations
Mathematical projections differ from real-world outcomes due to:
- Inflation: Purchasing power decreases over time. Real returns = Nominal Return – Inflation Rate.
- Vesting: Ownership of matched funds may require a vesting period (e.g., 3-5 years).
- Limits: The IRS sets annual contribution limits (e.g., $23,000 for 2024).
Frequently Asked Questions
How does the employer match calculation work?
The calculator adds the match percentage to the annual contribution. Example: $10,000 contribution + 50% match = $15,000 total annual investment.
What is a good rate of return to use?
The S&P 500 historically averages ~10% annually (nominal). Conservative estimates for planning often range between 6% and 8%.
Does this include inflation?
No. The result is the nominal future value. To estimate purchasing power, subtract expected inflation (e.g., 3%) from the input rate.