401(k) Growth Calculator

The single most important rule of 401(k) investing: always contribute enough to get the full employer match. On a $75,000 salary with a typical “100% match up to 4%” plan, that’s $3,000/year of free money. Skip it for 30 years of compounding at 7% and you walk away from roughly $300,000 in retirement savings. There is no other investment that gives you a guaranteed 100% return on day one.

The two most common match structures are 100% match up to 4% of salary (one-for-one, capped at 4%) and 50% match up to 6% of salary(50¢ on the dollar, capped at 6%). Both produce the same employer cost (3% of salary at full participation), but the second structure requires you to contribute more of your own money to capture it all. Check your plan documents and contribute at least up to the match cap.

Your own contributions are always 100% yours from the moment they hit the account. The employer match works differently — it follows a vesting schedule that determines how much you keep if you leave before retirement. The three common schedules:

• Immediate vesting: The match is yours from day one. Best case for the employee.
• Cliff vesting: Nothing vests until a specific anniversary (commonly 3 years), then 100% vests at once. Leave at 2 years 11 months, walk away with $0 of the match.
• Graded vesting: Vests in chunks (e.g. 20% per year for 5 years). Leave at year 3, keep 60% of the match.

Vesting schedules matter most when deciding whether to job-hop. Walking away from a chunk of unvested match is part of the real cost of a switch — check your vesting status before you hand in your notice.

A dollar contributed to your 401(k) at age 25 has 40 years to compound before you turn 65. At a 7% return, that doubles roughly every 10.3 years — meaning that one dollar becomes about $15. The same dollar contributed at age 45 has only 20 years to compound and turns into about $3.87. Same dollar, vastly different outcomes.

This is why your contribution rate at age 25 matters more than your contribution rate at 45. Front-loading contributions in your early career, even at the expense of lifestyle, is one of the highest-leverage financial decisions you’ll ever make. If you can hit 15% (you + match) in your 20s, the compounding does most of the work for you.

Traditional 401(k) contributions are pre-tax— they reduce your taxable income for the year you make them. A $23,500 contribution in the 24% federal bracket saves you about $5,640 on this year’s tax bill (plus state taxes). That immediate deduction is one of the biggest reasons people prefer Traditional to Roth 401(k) during their peak earning years.

The trade-off: every dollar you withdraw in retirement is taxed as ordinary income at whatever your bracket is then. The projected balance shown in the calculator is pre-tax. If you end up in the 22% federal bracket in retirement, multiply by roughly 0.78 to estimate your real spending power — or by even less once you factor in state income tax. This is why a Roth IRA or Roth 401(k) can be such a powerful complement: a slice of your retirement money that won’t owe Uncle Sam another cent.