401(k) Calculator

Why the first 6% of pay is worth more than the next 6%

The employer match is the only component of a 401(k) whose return is fixed in advance by a contract rather than by a market. Everything else in the projection — the expected return, the fee drag, the inflation adjustment — is an assumption you are choosing. The match is a rule your plan already published, and it pays out the moment you clear its threshold.

Work through the live example this page runs. A 35-year-old earning $100,000 defers 6% of salary into a plan matching 50% of the first 6% of pay. Half of six is three, so the employer adds three points of salary on top of the six the employee elected: $6,000 of deferral pulls in $3,000 of match, and nine percent of pay lands in the account for the price of six. Across the 30 years to age 65 that match totals $90,000.

Now defer five percent instead of six in that plan and the loss is not one percent of pay. It is one percent of your own money plus half a percent of the employer’s, forfeited for that plan year and unrecoverable afterwards, because a missed match does not roll forward. That asymmetry is why the deferral percentage that reaches your match cap is the first number to settle — before any argument about fund selection, expense ratios, or what the market will do. The maximiser above solves for it directly and reports the match left on the table if your current election falls short.

Two-tier formulas — a richer rate on an opening slice of pay, a thinner rate on a second slice — are handled the same way: the tool fills the generous tier first, then the cheaper one, and names the deferral percentage at which the last matched dollar is captured. Timing can undo all of it. If you front-load your deferral and hit the annual limit partway through the year, a plan without a true-up provision simply stops matching for the remaining pay periods, and that match is gone. The pay-periods and true-up inputs exist because plans genuinely differ here, and the difference is worth real money.

Past the match cap the arithmetic changes character. Additional deferral is ordinary invested saving, competing on merits with paying down debt or funding an IRA, and its return is whatever markets deliver. A common planning target is a total savings rate near 15% of income counting the match — in the example above, the six points deferred plus the three points matched come to nine, leaving a six-point gap to close gradually out of future pay rises. The right figure for you depends on your age, your other savings, and your budget, and the tool will show you what any deferral percentage does rather than prescribing one.

The 2026 deferral limit is not the ceiling on what can land in the account

Two separate IRS limits govern a 401(k) each year, and collapsing them into one is the most common misreading of the rules. The employee deferral limit caps what you personally elect to contribute: $24,500 for 2026 if you are under 50. The annual-additions limit caps everything credited to your account from all sources — your deferral, the employer match, profit sharing, after-tax contributions — and stands at $72,000 before catch-up. Subtract the first from the second and $47,500 of that combined ceiling is room only your employer can fill. Your own limit is untouched by anything the employer puts in.

Age moves the personal limit in two steps rather than one. From 50, an $8,000 catch-up raises the deferral ceiling to $32,500. Between ages 60 and 63 a larger super catch-up of $11,250 applies instead, taking the total to $35,750. The calculator caps the deferral you enter at the tier matching the age you supply and warns you when an election would exceed it, rather than quietly projecting a contribution the plan could not accept.

For most savers the annual-additions ceiling is theoretical and the deferral limit is the one that binds. It flips for high earners with a generous match, profit-sharing allocations, or an after-tax contribution feature: there the $72,000 figure becomes the real constraint, and the order in which money is credited starts to matter. If your plan offers after-tax contributions, that headroom is precisely the space between what you and your employer already put in and the combined cap.

These are indexed dollar amounts and they usually change from year to year. The projection deliberately holds the 2026 figures flat across every year of the schedule, which understates rather than overstates future headroom: real limits tend to drift upward with inflation indexing, so a frozen limit produces the more conservative balance. It also means the further out the schedule runs, the more the limit logic is a placeholder rather than a forecast. Confirm the current year’s numbers against the IRS pages cited below and against your own plan document before you rely on them.

Salary growth, fees, and inflation each bend the curve a different way

The projection advances period by period rather than resolving in one closed-form step, because the inputs interact. Salary growth lifts both the dollar value of a percentage deferral and the pay slice the match is measured against. An IRS cap that does not bind today can bind in a later year, once salary growth has pushed the deferral into it. Fees compound against you on exactly the same schedule the market compounds for you. Running the projection year by year is what lets these effects land in the right order rather than being averaged into a single multiplier.

The single number doing the most quiet work is the net return: your expected return minus the annual fee, applied before anything else happens. A fee is not a one-off deduction taken out of the final balance. It is a permanent reduction in the growth rate, so the gap between a fee-free and a fee-bearing projection does not stay constant — it widens every year the schedule runs, and it widens fastest at the end, when the balance is largest.

Inflation is handled by reporting every future balance twice. In the worked example, $1,117,891 at 65 becomes $532,946 once restated in today’s money at 2.5% inflation. Nothing has been lost between those two figures; they describe the same wealth in different units, and the second one is the unit you actually shop in. If the account is a traditional 401(k), the spendable amount is lower still, because that balance has a tax bill attached that neither figure subtracts.

The standing assumptions behind every projection on this page, in full:

• The projection runs period by period, so salary growth, the two-tier match, IRS limits, fees, and inflation all apply across the schedule.
• The IRS 2026 limits are held flat across the whole projection — the conservative choice, since real limits tend to rise over time with inflation indexing.
• The employer match is assumed to be fully vested; your own contributions are always 100% yours regardless of vesting.
• Net return = expected return − annual fee; future values are shown in both nominal terms and today’s money.
• The early-withdrawal estimate applies a flat 10% penalty plus ordinary income tax unless you indicate an exception applies.

Traditional and Roth grow identically here and diverge only at withdrawal

Switching the Traditional/Roth control does not move the projected balance, and that is deliberate rather than an oversight. The same contribution, compounding at the same net return for the same number of years, accumulates to the same figure whichever tax treatment applies to it. What differs is not how much is in the account. It is how much of the account is yours.

Traditional contributions are pre-tax: they reduce your taxable income in the year you make them, grow tax-deferred, and are taxed as ordinary income when you withdraw. Roth contributions are after-tax: no deduction now, but qualified withdrawals in retirement come out tax-free. So a traditional balance is a gross figure carrying a future liability, while a Roth balance of the same size is money you already own outright. Comparing the two headline numbers as though they were equivalent is the central error, and it is one this projection cannot make for you — it reports the balance and stops there.

The decision turns on a rate nobody can observe: your marginal tax rate now, against your marginal rate in the year you eventually draw the money. Expect a higher rate later and Roth looks strong; expect a lower one and traditional usually wins; and because the honest answer for most people is that they do not know, splitting contributions across both is a reasonable hedge rather than a fence-sit. This calculator does not model brackets, state tax, or how a withdrawal stacks on top of other retirement income, so it cannot tell you which side of that bet you are on.

One detail people assume incorrectly: the tax character of employer match dollars is set by your plan document, not by the election you make for your own deferral. Check what your plan does with match contributions rather than assuming they follow your choice, because it changes what the match line in the projection is worth after tax.

An early withdrawal is charged three times, and the third charge is the largest

Most people price an early 401(k) withdrawal as a single number, usually the tax. The estimator above splits it into three, because they are three distinct losses arriving through three different mechanisms, and only the first one shows up on a tax form you will recognise.

The income tax comes first. A traditional 401(k) distribution is ordinary income in the year you take it, computed here at the rate you enter rather than against a bracket table this tool does not carry — which means a large withdrawal that pushes you into a higher bracket will cost more than the estimate suggests. Second is the additional tax: a flat 10% on distributions taken before age 59½, unless an exception applies. The rule of 55, disability, and several other categories set out in the IRS guidance cited below can remove it, and the estimator charges the penalty unless you tell it an exception is in play.

The third charge never appears on a statement. Money withdrawn stops compounding, permanently, and compounding is what produces most of a retirement balance in the first place. The example above starts from $25,000 and adds $9,000 a year, yet arrives at $1,117,891: the distance between those inputs and that output is growth, not deposits. A withdrawal takes its proportional share of that growth away with it, and the earlier it happens the larger that share is. The estimator prices this as lost future value so it sits alongside the tax and the penalty instead of being felt only decades later.

What the estimator does not do bounds how far you should trust it. It does not model a 401(k) loan, which follows different rules and repays itself with interest. It does not know your plan’s hardship criteria, or whether your plan permits in-service withdrawals at all. It does not apply state or local tax beyond the rates you type in, and it does not consider whether a rollover would meet the same need without the penalty. Read the output as an order of magnitude, then confirm the specifics with a tax professional and your plan administrator before you act on it.

Your deferral is yours today; the match is yours on the plan’s schedule

Every projection on this page assumes the employer match is fully vested. That is the optimistic case, and for anyone who might change employers before retirement it is the assumption most likely to be wrong — which makes it the one worth checking first against your own plan.

Money deferred from your own pay is 100% yours from the moment it is withheld, unconditionally, in every plan. Employer contributions are a different kind of object: they belong to you only to the extent the vesting schedule says they do. Some plans vest the match immediately. A cliff schedule gives you nothing until a stated service date and then everything at once. A graded schedule hands over a rising fraction each year. Leave before the schedule completes and the unvested portion is forfeited back to the plan, no matter how long it has been sitting in your account or how much it has grown.

That reframes one line in the worked example. The $90,000 of total employer match is an entitlement contingent on service, not a balance you have already banked. If you expect to leave before a cliff date, the informative move is to re-run the projection with the match rate set to zero: that gives you the floor, and the difference between the two runs is exactly what staying is worth. Your summary plan description is where the schedule is written down, and it is a five-minute read that changes what this projection means.

Vesting also interacts with job changes in ways the model has no notion of. A rollover moves your vested balance to a new plan or an IRA, where a different match formula, different fees, and a different fund menu take over. This tool projects one plan held continuously from today to retirement; it does not track transfers, does not aggregate several accounts, and does not model a new employer’s terms. If your career has more than one plan in it, run the projection per plan and add the results yourself.

A steady 7% return is a planning device, not a forecast

The projection compounds at whatever return you enter and applies it evenly to every year of the schedule. Real markets do not deliver returns that way, and the difference is not cosmetic. Two portfolios that average the same return across thirty years can finish far apart depending purely on when the bad years arrive, because a loss early in the schedule compounds forward while a loss late in it lands on a much larger balance. A constant-rate model cannot express that at all — it has no ordering to be sensitive to.

This is what the scenario panel is for. Running a conservative, a base, and an optimistic return and reading the spread between them is more informative than the base figure alone, because the spread is the honest form of the answer: a range, not a point. Treat the base projection as the middle of a distribution whose edges you cannot see, and treat any single balance quoted to the dollar decades out as a unit of comparison rather than a prediction.

The year-by-year schedule serves the same purpose from the other direction. Change one input at a time — the return, the fee, the retirement age, the deferral percentage — and watch which years of the curve move. That tells you which assumption your answer actually depends on, which is more useful than the answer, because it tells you where to spend your attention and where a rough guess is good enough.

This calculator does not predict markets and does not guarantee any outcome. Its limitations are worth naming explicitly, because they bound what the number means:

• Sequence-of-returns risk and real market volatility (the model uses a constant return)
• Vesting schedules and forfeited employer contributions if you leave early
• The exact tax treatment of traditional vs Roth withdrawals
• Your full income, capital-gains, and state tax picture
• 401(k) loans, hardship rules, required minimum distribution specifics, and future changes to IRS limits or law

Used as a comparison instrument — this deferral against that one, retiring at 65 against 67, a plan with a match against a plan without — the model is dependable, because the assumptions you are unsure about apply equally to both sides and cancel. Used as a prediction of one future balance, it is not dependable, and no retirement calculator is. The value is in the comparison, not in the last four digits.

Sources

Contribution limits (plan year 2026): the $24,500 employee deferral limit, the $8,000 age-50 catch-up, the $11,250 super catch-up for ages 60–63, and the $72,000 combined annual-additions limit used by this calculator are the IRS dollar limitations for 2026. They are indexed and usually change each year — the two IRS pages below are the authority for the current figures, not this page.

Early-withdrawal estimate: the flat 10% additional tax before age 59½ and the exception categories named above (rule of 55, disability, and others) follow the IRS guidance on early distributions; the income-tax portion uses the rate you enter, not a tax table.

• IRS — 401(k) and profit-sharing plan contribution limits (deferral and annual-additions structure)
• IRS — COLA increases for dollar limitations (the year-by-year limit figures, including 2026)
• IRS Tax Topic 558 — additional tax on early distributions (the 10% figure and its exceptions)
• How we calculate — site-wide methodology

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Read the guide

For how a retirement withdrawal projection is actually built, and why it moves so much when you nudge one input, see How to Estimate Retirement Withdrawals Without Overtrusting One Number.