What Is a 401(k) Calculator?
A 401(k) calculator helps you estimate how much your retirement savings will grow over time based on your salary, contribution rate, employer match, expected return, and inflation.
How the 401(k) Calculation Works
The retirement balance grows using compound interest:
Future Value = Present Value × (1 + r)^n
Where r is expected annual return and n is years until retirement.
Understanding Employer Match
If your employer matches 50% up to 6% of salary, contributing at least 6% ensures you receive full match — effectively free money.
Inflation Adjustment
Inflation reduces purchasing power. This calculator adjusts retirement value into today's dollars.
Example Scenario
Age 30 earning $80,000 contributing 10% with 5% employer match at 7% return retiring at 65 can accumulate over $1.5M depending on inflation.
Why Annual Return Matters
Even 1% higher return significantly increases retirement balance due to compounding.
Withdrawal Strategies
- Fixed purchasing power withdrawals
- Fixed monthly withdrawals
- Annual fixed withdrawals
Common Mistakes to Avoid
- Underestimating inflation
- Not maximizing employer match
- Stopping contributions early
Who Should Use This Calculator?
Employees planning retirement, financial planners, HR advisors, and individuals evaluating long-term investment growth.