Use the 401(k) Calculator to project retirement savings, employer matching, investment growth, or the contribution rate needed to reach a goal at retirement.
401(k) Calculator Formula
The calculator models a whole number of years using a constant annual return, annual salary increases and a midyear contribution approximation. It rejects partial-year horizons instead of discarding the fractional year.
For each year:
B_{t+1}=B_t(1+r)+(C_t+M_t)(1+r/2)
Contributions are:
Employee C = salary × employee rate Employer M = salary × min(employee rate, match cap) × match per dollar
Variables:
- B is the account balance
- r is annual return
- S is salary
- c is employee contribution rate
- m is the match cap
- q is the employer match per dollar
Projected-balance mode uses a known contribution rate. Contribution-needed mode searches from 0 to 100 percent for the rate that reaches the target.
A 50 percent match capped at 6 percent of salary contributes at most 3 percent of salary.
The projection is a planning model and does not enforce changing annual contribution limits.
Common 401(k) Match Formulas
The maximum employer contribution depends on both the match rate and the cap.
| Match formula | Employee rate for full match | Maximum employer amount |
|---|---|---|
| 50% up to 6% | 6% | 3% of salary |
| 100% up to 3% | 3% | 3% of salary |
| 100% up to 4% | 4% | 4% of salary |
| 50% up to 8% | 8% | 4% of salary |
Example Problems
Example 1: Project a retirement balance.
For age 35 to 67, a current balance of $85,000, $90,000 annual salary, 10% employee contribution, 3% annual salary growth, 7% annual return, and a 50% match up to 6% of salary produce an estimated $2,599,663.20 after 32 years. Employee contributions total $472,524.83 and employer matching totals $141,757.45 before investment growth. This is an assumed projection, not a guaranteed outcome.
Example 2: Solve for a contribution rate.
With the same ages, balance, salary, growth, return and employer match, a $1,500,000 target requires approximately 3.539660% of salary under this model. The search uses the unrounded rate internally. If the existing balance alone reaches the target, the minimum rate is 0%; if 100% of salary cannot reach it, the calculator reports that the target is unreachable.
Frequently Asked Questions
Does the calculator include employer matching?
Yes. Enter the match percentage per dollar and the contribution cap eligible for matching.
Are contribution limits enforced?
No. The result does not enforce annual employee deferral, total contribution or compensation limits, catch-up rules or plan restrictions. Compare it with your plan documents and the current IRS contribution limits. A mathematically reachable rate can exceed those limits.
Should the return be nominal or real?
Use a nominal return with future-dollar salary and targets, or a real return when every amount is stated in today's purchasing power.
