How to use this 401(k) calculator
Enter your annual salary and the percentage you plan to contribute. Then add your employer's match formula — most employers match 50–100% of contributions up to a cap (typically 3–6% of your salary). Finally, set your expected return rate and years until you plan to retire.
The calculator shows your projected balance, annual contributions from both you and your employer, and total growth over your career. The employer match is free money — if you're not contributing enough to capture the full match, that's the single highest-return financial move available to you.
How the 401(k) math works
Each year, your total contribution (yours + employer match) is invested and earns your expected return. The balance compounds annually using the standard future-value formula: FV = PV × (1+r)n + PMT × [(1+r)n − 1] / r, where PV is your current balance, PMT is total annual contributions, r is the annual return, and n is years to retirement.
The 2025 IRS limit on employee contributions is $23,500 (or $31,000 if you're 50 or older with catch-up). Employer contributions don't count toward this cap.
Example
Suppose you earn $75,000, contribute 10% ($7,500/year), and your employer matches 100% up to 5% of salary (adding $3,750). With a 7% return over 30 years, that $11,250 per year grows to roughly $1.1 million. Without the employer match, the same contribution reaches about $750K — your employer adds over $300K to your retirement just from matching.
Frequently asked questions
What is the 401(k) contribution limit for 2025?
For 2025, you can contribute up to $23,500 if you are under age 50. If you are 50 or older, the catch-up provision adds $7,500 for a total limit of $31,000. Employer contributions are separate and do not reduce your personal cap.
How does employer 401(k) matching work?
A common formula is "100% match up to 5% of salary." If your salary is $70,000 and you contribute 5% ($3,500), your employer adds another $3,500. Contribute less than 5% and you get a proportionally smaller match. Always contribute at least enough to capture the full match — it's an instant 100% return on that money.
What annual return should I use?
A diversified stock-heavy portfolio has historically returned roughly 7% per year after inflation (about 10% before inflation). Use 6–7% for conservative planning. If your plan has high expense ratios, subtract 0.5–1% for a more accurate projection.
Should I contribute to traditional or Roth 401(k)?
Traditional contributions reduce your taxable income now; you pay taxes on withdrawals in retirement. Roth contributions are after-tax but grow and withdraw tax-free. If you expect to be in a higher tax bracket in retirement, Roth is generally better. If you expect a lower bracket, traditional usually wins.
Does my employer match count toward the IRS limit?
No. The $23,500 employee limit applies only to your contributions. Employer contributions are separate. The combined 2025 limit (employee + employer) is $70,000.