What return rate should I use for a 401(k)?

For a diversified stock-heavy portfolio, 7% is the standard inflation-adjusted long-term average for the U.S. stock market. For nominal returns, 10% is often cited. For conservative or bond-heavy portfolios, 4–6% is more appropriate. Use 6–7% as a prudent planning rate — it accounts for investment costs and reduces overestimation risk.

What is the 2024 401(k) contribution limit?

$23,000 for employees under 50 in 2024. Those 50+ may contribute an additional $7,500 (catch-up), for a total of $30,500. These limits apply to employee contributions only — employer contributions are separate and don't count against them. Total combined limit (employee + employer) is $69,000 in 2024.

Should I contribute to a Traditional or Roth 401(k)?

Traditional: contributions are pre-tax (reducing current taxable income), withdrawals in retirement are taxed. Roth: contributions are after-tax, withdrawals are tax-free. If your tax rate will be lower in retirement, Traditional wins. If equal or higher, Roth wins. If unsure, splitting between both hedges your tax exposure. Use the Roth IRA calculator to model the comparison.

What happens to my 401(k) when I change jobs?

Four options: leave it with your old employer (allowed if balance is above $5,000), roll it over to your new employer's 401(k), roll it over to an IRA, or cash it out. Cashing out triggers income tax plus a 10% penalty before age 59½ — avoid this. An IRA rollover preserves the full balance and may offer more investment options than either employer plan.

How does a 401(k) loan work?

You can borrow up to 50% of your vested balance (or $50,000, whichever is less) and repay yourself with interest over 5 years. The risk: if you leave your job before repaying, the outstanding balance is treated as a distribution — subject to tax and the 10% penalty. Additionally, the borrowed amount stops compounding during the loan period, which has a permanent cost to your retirement balance.

📈Investing

401(k) Calculator – How Much Will Your Retirement Be Worth?

How much will your 401(k) be worth?

What This Does

Your 401(k) is likely the single most powerful wealth-building tool available to you — but most people dramatically underestimate how much it can accumulate. The math of compound interest is counterintuitive: growth is slow early and explosive late. A 35-year-old contributing $500/month with a 7% average return will have roughly $620,000 by 65. The same person starting at 25 would have over $1.2 million — nearly double, from just 10 extra years. The employer match makes the 401(k) even more powerful. If your employer matches 50% of contributions up to 6% of your salary, that's an instant 50% return on every dollar you contribute up to the match limit. No investment on earth guarantees that. Not capturing the full employer match is the single most common and costly retirement planning mistake — it's leaving part of your compensation on the table. This calculator projects your 401(k) balance at retirement using your current age, current balance, annual contribution, employer match, and expected return. It generates a year-by-year growth table so you can see exactly how your balance compounds — and lets you model the impact of increasing contributions, starting earlier, or adjusting your expected return.

Assumptions

·Annual contributions and employer match are invested evenly throughout the year
·Employer match is applied up to the percentage of salary you specify — contributions above the match threshold receive no additional match
·Returns compound annually (monthly compounding produces very similar results over long periods)
·Does not account for annual contribution increases tied to salary growth
·Pre-tax contributions only — Roth 401(k) projections require the Roth IRA calculator for after-tax comparison

How It's Calculated

Annual effective contribution = Employee contribution + Employer match (capped at match limit) Balance after year 1 = (Previous balance + Annual contribution) × (1 + expected return) Repeated for each year until retirement age. Employer match example: Salary $75,000 · Employee contributes 8% ($6,000) · Employer matches 50% up to 6% ($75,000 × 6% × 50% = $2,250) · Total invested year 1: $8,250. Effective return on contributed dollars in year 1 = ($8,250 – $6,000) / $6,000 = 37.5% guaranteed return before any market growth.

When Should You Use This?

→Projecting your balance at retirement based on current contribution rate
→Finding out how much more you need to save to reach a specific retirement target
→Seeing the dollar value of your employer match in the final balance
→Modeling different retirement timelines — what does retiring at 62 vs. 67 cost you?
→Open enrollment — deciding whether to increase your contribution percentage

Worked Examples

Example 1: Mid-career contributor capturing full match

Inputs: Age: 34 · Current balance: $45,000 · Salary: $75,000 · Contribution: 8% ($6,000/yr) · Match: 50% up to 6% ($2,250/yr) · Return: 7% · Retire at: 65

Result: Projected balance at 65: ~$975,000 · Total contributed (employee): $186,000 · Total with match: $255,750 · Growth component: ~$719,000

The employer match adds $69,750 in contributions — but because it compounds for 31 years, its actual value in the final balance is far greater. Missing the match entirely would reduce the final balance by roughly $200,000.

Example 2: Starting 10 years earlier — same contributions

Inputs: Age: 24 · Current balance: $0 · Salary: $75,000 · Same 8% contribution + 50% match · Return: 7% · Retire at: 65

Result: Projected balance at 65: ~$1,890,000 · vs. starting at 34: ~$975,000 · Value of 10 extra years: ~$915,000

Starting contributions at 24 instead of 34 — with the exact same amounts — nearly doubles the final balance. The first decade of contributions has 40+ years to compound, making early contributions the most valuable dollars in a 401(k).

📈401(k) Calculator

401(k) Retirement Planner

Enter your salary, contribution, employer match, and timeline to project your 401(k) balance, retirement income, and score. Results update live.

Income & Contributions

Annual Salary ($)

Your Contribution (%)

2024 limit: $23,000 · age 50+: $30,500

Employer Match Rate (%)

e.g. 50% = employer adds $0.50 per $1 you contribute

Match Cap (% of salary)

Match only applies up to this % of your salary

Growth & Timeline

Current 401(k) Balance ($)

Expected Annual Return (%)

S&P 500 historical: ~10% nominal, ~7% real

Current Age

Retirement Age

Current Tax Bracket (%)

Pre-tax contributions reduce taxable income — net cost of saving $1 is only $0.76

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Common Mistakes to Avoid

✕Not contributing enough to capture the full employer match — this is leaving part of your salary unpaid
✕Cashing out a 401(k) when changing jobs — the 10% early withdrawal penalty plus income tax can destroy 30–40% of the balance
✕Leaving the default investment allocation unchanged if it's a money market or stable value fund — these don't generate growth
✕Treating the 401(k) balance as a savings account to borrow from — loans interrupt compounding and create repayment pressure
✕Not increasing contributions after a raise — if your lifestyle doesn't change but your salary does, the extra can go straight to retirement

Frequently Asked Questions