How the 401(k) projection works
This calculator projects your retirement savings year by year. Each year your existing balance grows by the expected return, and then your contributions plus your employer's match are added. Your salary rises by the raise percentage you enter, so contributions grow over time too. The result is a nominal estimate (in future dollars) of what your account could be worth on the day you retire.
Why the employer match matters
An employer match is effectively an instant return on your money. If your company matches 100% of the first 4% you contribute, contributing less than 4% means leaving free money on the table. Enter the match as the percentage of your salary your employer actually deposits. For example, a 50% match on up to 6% of pay is 3%.
Contribution limits
The IRS sets annual limits on how much employees can defer into a 401(k), with an extra catch-up amount allowed from age 50. Limits are adjusted most years for inflation, so check the current figure at IRS.gov. IRAs have their own, lower limits.
How much income will it provide?
A common rule of thumb is the 4% rule: withdrawing about 4% of your portfolio in the first year of retirement, then adjusting for inflation, has historically lasted around 30 years in most market conditions. The calculator shows that 4% figure as a rough estimate of yearly income. Social Security, pensions and other income would come on top.
Making the estimate realistic
- Use a conservative return (5–7%) for a diversified stock and bond mix.
- Remember results are in future dollars. With 2.5% inflation, $1 million in 35 years buys roughly what $420,000 does today.
- Traditional 401(k) withdrawals are taxed as income; Roth withdrawals generally are not.
- Increasing your contribution by just 1% a year can make a large difference over decades.
This tool is for education and planning, not personalized financial advice.
Frequently asked questions
How much should I save for retirement?
Many planners suggest saving 15% of income including employer match, and aiming for roughly 10–12 times your final salary by retirement.
What return should I assume?
For long-term planning, 5–7% per year is a common conservative assumption for a balanced portfolio before inflation.
Is the result adjusted for inflation?
No, it is shown in future dollars. Lower the return by your expected inflation rate to see a figure in today’s dollars.