401(k) Calculator

How the calculator builds the balance

The projection runs on four moving parts: what you put in, what your employer puts in, what the investments earn, and how long the money sits there. Each pay period adds a contribution, the balance earns a return, and the loop repeats until your retirement age.

Two details keep the answer honest. Contributions are capped at the annual deferral limit, so a high earner who sets 30% of pay does not get to contribute $90,000. And salary growth is applied each year, which means the dollar amount you contribute rises with your pay rather than staying frozen at today's number.

The calculator compounds monthly, adds contributions monthly and grows your salary once a year. That is close to how a real payroll deduction behaves, and it avoids the optimistic result you get from adding a full year of contributions at the start of each year.

The 2026 contribution limits that cap your deferral

The Internal Revenue Service adjusts these numbers each fall for inflation, and the 2026 figures come from Notice 2025-67. They apply to the calendar year that starts January 1, 2026.

The $24,500 cap is the one most people hit. At $75,000 of pay you would need to defer 32.7% of salary to reach it, which is why the cap matters mainly above $200,000 of income. The catch-up limits matter at any income, because they are the only way to add dollars once the base limit is full.

Watch the interaction with the $72,000 total limit. A generous employer match plus your own maximum deferral can push the total past that ceiling, and the plan has to stop or refund the excess. The plan administrator handles the correction, but the refund shows up as taxable income in the year it comes back.

The full table is on the IRS Notice 2025-67 and the summary pages at irs.gov. Limits are indexed, so the 2027 numbers will differ.

Employer match: the raise you have to ask for

A match is written as two numbers: the percentage of each dollar the employer adds, and the share of pay that qualifies. A 50% match on the first 6% of pay means the employer adds 50 cents for every dollar you contribute, up to 6% of your salary.

The third row is the one to study. Going from 6% to 8% adds $1,500 of your own money and zero match, because the match was already maxed at 6%. That extra 2% still helps, but it is no longer free money. Anything you contribute below the match cap is the only part of this whole exercise with a guaranteed 50% or 100% return.

Two rules bite here. Vesting schedules can require up to six years of service before the match is fully yours, so leaving early can forfeit part of it. And the match usually has an ownership window, often one year, which is why a job change in month eight can cost you the whole employer piece. Ask for the plan's summary description and read the vesting line before you count the match in your budget.

Worked example: age 30, $75,000 salary, 8% deferral

Start at 30 with $25,000 already in the plan, earn $75,000, defer 8% of pay and collect a 50% match on the first 6%. Assume a 7% annual return and 2.5% raises, and retire at 65.

Your deferral is $6,000 this year and the match is $2,250, so $8,250 goes in. After 35 years the balance reaches $1,933,069. Of that, $329,569 is your own money, $123,588 came from the employer and $1,454,911 is investment growth.

Growth is 75% of the final balance, and that share rises the longer the money sits. It also explains why a late start is expensive: the early dollars are the ones with the most time to compound.

One check on the input side: 8% of $75,000 is $6,000, well under the $24,500 limit, so no cap applies. If your salary were $320,000, an 8% deferral would be $25,600 and the calculator would trim it to $24,500, then show the leftover as unmatched pay. That is the correct behavior, not a bug.

Five years earlier beats five points of extra return

Time is the input with the largest effect, and it is the one you cannot buy later. The table starts everyone at $0 and holds salary, deferral and return constant, so the only variable is the age you begin.

Waiting from 25 to 30 costs $809,543, and the five years of contributions you skipped are only $41,250 of it. The rest is the growth those contributions would have earned. Waiting from 30 to 40 costs $947,920, which is more than the entire balance at 40.

The practical reading: if you are behind, raising the deferral percentage helps less than starting now at a modest rate. A 30-year-old who begins at 3% today and raises it one point a year beats a 30-year-old who plans to start at 12% in five years, because the second plan usually never starts.

Return assumptions: 5%, 7% and 9%

Nobody knows what the market will return, so the projection is only as good as the rate you type in. Each figure below uses the same $25,000 start, $75,000 salary and 8% deferral, and changes only the return.

• 5% a year: $1,227,687, which is $705,382 below the 7% case
• 6% a year: $1,532,693, which is $400,376 below
• 7% a year: $1,933,069, the baseline used above
• 8% a year: $2,461,472, which is $528,403 more
• 9% a year: $3,162,287, which is $1,229,218 more

Two points of return move the answer by more than $1.2 million, which is why a single number in a retirement ad deserves suspicion. A broad stock fund has returned roughly 7% a year after inflation over long stretches, and a target date fund glides toward bonds as you age, so its return falls in the last decade.

A safer habit is to run the projection three times at 5%, 7% and 9% and plan your spending around the low case. If the low case still covers your bills, the plan survives a bad decade. If it does not, the fix is more contributions or a later retirement date, not a higher assumed return.

Fees belong in the same conversation. A 1% annual fee on a $1.9 million balance is $19,000 a year, and over 35 years it removes a sum that looks like a second down payment. The Department of Labor's Employee Benefits Security Administration publishes a guide to 401(k) fees that explains what to look for in the plan's fee disclosure.

Taking money out early: the 10% penalty and the exceptions

Money in a 401(k) is meant to stay there until retirement. Withdraw it before age 59 and a half and the IRS generally adds a 10% additional tax on top of ordinary income tax. On a $10,000 withdrawal in the 22% bracket, that is $2,200 of income tax plus a $1,000 penalty, so you keep $6,800 and lose the growth those dollars would have earned.

The penalty has exceptions, and they are narrower for a 401(k) than for an IRA. The IRS list of exceptions to the early distribution tax covers the main ones:

• Age 59 and a half, which ends the penalty for good.
• Disability or death, including payments to a beneficiary.
• Substantially equal payments, a fixed series of withdrawals that must run for five years or until 59 and a half.
• Birth or adoption, up to $5,000 per child.
• Emergency expenses, one withdrawal a year up to $1,000.
• Domestic abuse, up to the lesser of $10,000 or 50% of the account.
• Federally declared disaster, up to $22,000 for a qualified loss.
• Unreimbursed medical costs above 7.5% of adjusted gross income.
• IRS levy and certain military reservist call-ups.

Three exceptions that work for an IRA do not work for a 401(k): a first home purchase, qualified higher education and health insurance while unemployed. If you are between jobs, the plan may allow a distribution at 55 under the rule of 55, but only from the plan of the employer you just left, and only in the year you turn 55 or later.

The penalty is not the whole cost. A $10,000 withdrawal at 32 also gives up 33 years of growth, which at 7% is about $93,000 by age 65. That forgone balance is the reason a 401(k) loan or a smaller emergency fund is usually the cheaper route, and the reason the calculator treats every dollar you leave in the plan as worth far more than its face value.

What this projection cannot tell you

This is a straight-line model with a constant return, and real markets are not straight. A bad first decade hurts more than a bad last decade, and a 7% average can hide a 30% drop in year two. The projection also ignores taxes on withdrawals, which will take a bite out of every dollar in a pre-tax account.

Three inputs deserve your own numbers rather than the defaults. Your retirement age should match when you plan to stop working, not the age you hope to. Social Security can start at 62, and full retirement age is 67 for anyone born in 1960 or later, so the gap between your last paycheck and your first benefit check is a real cost. And the employer match should be the formula in your own plan document, not the 50% of 6% used here.

Finally, the balance at 65 is not a spending budget. A common rule of thumb is to withdraw 4% of the balance in the first year, which on $1,933,069 is about $77,000 before tax. That figure, not the headline balance, is what pays the bills.

This is an estimate for planning, not tax or investment advice. Contribution limits, penalty rules and tax rates change, so confirm the current figures with the IRS or a qualified tax professional before you act on them.