Balance at Retirement
Total Contributions
Total Growth
Table of Contents
Why this calculator matters
A 401(k) plan is the biggest retirement vehicle most American workers will ever use — and the difference between projecting it with optimistic assumptions and realistic ones can be six figures by retirement. This calculator models contribution growth, employer matching and compounding so you can see how today's decisions compound across decades.
| Year | Age | Annual Contributions | Interest Earned | Balance |
|---|
How a 401(k) balance is projected
The future value of a 401(k) is a future-value-of-an-annuity calculation layered on top of the current balance:
FV = B0(1 + r)t + C × [ ((1 + r)t − 1) ÷ r ]
- FV — projected balance at retirement
- B0 — current 401(k) balance
- C — annual contribution including employer match (employee deferral × (1 + match%))
- r — expected annual rate of return (as a decimal)
- t — years until retirement (retirement age − current age)
Worked example using the calculator's defaults (age 30 to 65, $10,000 starting balance, $6,000/year employee contribution, 50% employer match, 7% return):
- t = 65 − 30 = 35 years
- C = $6,000 × 1.50 = $9,000/year (employee + match)
- (1.07)35 ≈ 10.677
- Existing balance grows to: 10,000 × 10.677 = $106,766
- Annual contributions grow to: 9,000 × (9.677 ÷ 0.07) ≈ $1,243,750
- Projected total: ≈ $1,350,500
Of that total, you contributed $210,000 out of pocket and the employer added $105,000 — everything else (more than $1 million) is compound investment growth on contributions that were never taxed up front.
2026 contribution limits at a glance
The IRS adjusts limits annually for inflation. Recent and current figures:
| Year | Employee deferral | Catch-up (age 50+) | Total employee + employer |
|---|---|---|---|
| 2023 | $22,500 | $7,500 | $66,000 |
| 2024 | $23,000 | $7,500 | $69,000 |
| 2025 | $23,500 | $7,500 | $70,000 |
| 2026 | $23,500 | $7,500 | $70,000 |
Workers aged 60–63 get a "super catch-up" of $11,250 instead of the standard $7,500 under SECURE 2.0. Self-employed workers using a solo 401(k) can also contribute the full employer side themselves, pushing the practical limit to $70,000.
Employer matching: how the typical formulas pay out
Match formulas vary widely. Here's what your employer's match adds on a $80,000 salary if you contribute 6% ($4,800):
| Match formula | Match received | Effective return on your $4,800 |
|---|---|---|
| None | $0 | 0% |
| 50% up to 6% of pay (median) | $2,400 | +50% |
| 100% up to 3%, 50% on next 2% (Safe Harbor) | $3,200 | +67% |
| 100% up to 6% of pay (generous) | $4,800 | +100% |
Note the vesting schedule on employer contributions. About a third of plans vest immediately; the rest use either cliff vesting (you forfeit everything if you leave before, e.g., year 3) or graded vesting (you earn ownership in increments). Your own contributions are always 100% yours immediately.
Traditional vs Roth 401(k): the actual decision
The choice is a bet on your future tax bracket. The mechanics:
| Traditional 401(k) | Roth 401(k) | |
|---|---|---|
| Contribution treatment | Pre-tax (lowers current taxable income) | After-tax (no upfront deduction) |
| Growth | Tax-deferred | Tax-free |
| Withdrawals | Taxed as ordinary income | Tax-free if qualified (5 years + age 59½) |
| Required Minimum Distributions | Yes, starting age 73 | No, since 2024 (SECURE 2.0) |
| Better if… | You expect a lower tax bracket in retirement | You expect the same or higher bracket later |
For most workers under 35 who aren't in the top federal brackets today, Roth tends to win the math. For high earners already in the 32%+ brackets, traditional usually wins. When in doubt, split contributions — it diversifies your tax exposure in retirement.
Starting early: why decade-one matters most
Maxing the IRS deferral limit ($23,500/year, no match assumed) at 7%, starting at different ages, ending at 65:
| Start age | Years contributing | Total contributed | Balance at 65 |
|---|---|---|---|
| 25 | 40 | $940,000 | $4.7 million |
| 35 | 30 | $705,000 | $2.2 million |
| 45 | 20 | $470,000 | $963,000 |
| 55 | 10 | $235,000 | $325,000 |
The 25-year-old contributes only one-third more dollars than the 45-year-old but ends with nearly five times the balance — entirely because of the extra 20 years of compounding on the early dollars.
Limitations of this projection
- Constant returns assumed. The calculator applies the same return every year. Real markets are volatile — you could earn 25% one year and lose 30% the next. Average outcomes tend to be close to the input return over long horizons, but sequence of returns matters, especially close to retirement.
- No salary growth. Contribution amounts are held flat. Most workers raise contributions over time as salaries rise; your real balance will likely be higher than projected if you escalate contributions.
- No fees deducted. Plan fees and fund expense ratios silently reduce returns. A 0.75% all-in fee turns a 7% gross return into a 6.25% net — on $1.3M projected balance, that's roughly $200,000 in lost compounding. Audit your fund choices.
- Nominal dollars, not inflation-adjusted. A $1.3M nominal balance in 35 years is worth roughly $540,000 in today's dollars at 3% inflation. To plan in today's dollars, use a real return (nominal − inflation, e.g. 4%) instead.
- Tax law changes. Contribution limits, RMD ages, and tax brackets all change. Don't lock in irreversible decisions based on today's rules.
Sources & references
- IRS — 401(k) Contribution Limits — official annual limits and catch-up rules.
- IRS — Required Minimum Distributions — RMD age and calculation rules.
- Vanguard — How America Saves — annual report on plan design, match formulas and participant behavior.
- US Department of Labor — 401(k) Plans — participant protections, vesting and disclosure rules.
- Social Security Administration — COLA history — inflation series used to index contribution limits.
FAQs
The IRS employee elective deferral limit for 2026 is $23,500. Workers aged 50 or older can add a $7,500 catch-up contribution, raising their personal limit to $31,000. The combined employee + employer cap is $70,000 ($77,500 with catch-up). These figures are indexed for inflation and change most years — always confirm at IRS.gov before maxing out.
Vanguard's 2024 How America Saves report found the median employer match formula was 50% of contributions up to 6% of pay — effectively a 3% of salary match. On a $80,000 salary that's $2,400 per year of free money, but only if you contribute at least 6% ($4,800) yourself. Skipping the match is one of the single most expensive mistakes in personal finance — you're declining a guaranteed 50–100% return on those dollars.
Pick traditional if you expect a lower tax bracket in retirement than you're in now (typical for higher earners). Pick Roth if you expect the same or higher bracket later (typical for younger workers, lower earners, or anyone expecting tax rates to rise). Many plans now let you split contributions between both for tax diversification. Note that since 2024, Roth 401(k)s no longer have Required Minimum Distributions thanks to SECURE 2.0.
The long-run nominal return of a diversified US equity portfolio has been roughly 9–10% before inflation, or 6–7% in real (inflation-adjusted) terms. For planning purposes, 6–7% is the conservative choice — it accounts for the fact that you'll experience inflation as a retiree. Plugging in 10% feels good but overstates the purchasing power you'll actually have.
Early withdrawals normally trigger a 10% federal penalty plus ordinary income tax. For someone in the 22% federal bracket, a $10,000 early withdrawal nets only about $6,800 after tax and penalty — before state tax. Exceptions exist (disability, certain medical expenses, separation from service after age 55, SEPP/Rule 72(t) distributions, and the new $1,000 emergency withdrawal under SECURE 2.0), but the default cost is steep enough that a 401(k) loan is usually preferable when funds are truly needed.