401(k) Growth Calculator

How this calculator works

Each year the model computes your annual contribution (salary × employee %) and your employer's match (salary × min(your %, employer cap) × employer match %). Both flow into the account monthly and compound at the per-month equivalent of your expected annual return.

At the end of each year, your salary is grown by the annual salary growth rate to simulate cost-of-living and career raises. The chart shows cumulative employee contributions, employer match, and account balance year-by-year.

Why the 401(k) match matters so much

A 401(k) employer match is one of the best financial instruments available to most W-2 employees. A typical match — say, 100% on the first 3% of salary — is an immediate 100% return on those dollars, before markets even do anything. Skipping the match means passing up what is effectively a guaranteed high-interest deposit.

The specific mechanics vary widely: some employers offer dollar-for-dollar matching up to a cap (100% match on first 3-6%), others offer partial matching (50% on first 4-10%), and some provide a flat contribution regardless of participation. Less common arrangements include true-up provisions (catching up unmatched contributions at year-end) and immediate vs. graded vesting schedules.

Even without the match, 401(k)s offer significant tax advantages. Traditional 401(k) contributions reduce current-year taxable income, and the balance compounds tax-deferred. Roth 401(k) contributions are made with after-tax dollars but grow and are withdrawn tax-free. For most investors in their 30s and 40s, at least some Traditional contributions make sense because their marginal tax rate today is likely higher than in retirement.

The 2025 employee contribution limit is $23,500 ($31,000 for those 50+ with the standard catch-up, and $34,750 for those aged 60-63 with the enhanced SECURE 2.0 catch-up). Employer contributions are additional. Maxing out your 401(k) in your 30s and 40s, combined with consistent market returns, routinely produces seven-figure balances by traditional retirement age.

Frequently Asked Questions

What's the 2025 401(k) contribution limit?

$23,500 for employees under 50. Those 50 and older can add a $7,500 catch-up contribution for $31,000 total. A new enhanced catch-up (SECURE 2.0) allows those aged 60-63 to contribute up to $34,750. Employer contributions are separate and don't count against these employee limits.

Traditional or Roth 401(k)?

Generally, Traditional when your current tax rate is higher than expected in retirement, and Roth when the opposite. In practice, many high earners default to Traditional in their peak earning years; many younger workers in the 22-24% bracket choose Roth for tax-free retirement withdrawals. Most plans let you split contributions between both.

Should I always contribute enough to get the full match?

Yes, in almost all cases — unless you have extreme-interest debt (20%+ credit cards) that requires immediate focus. The employer match is a 50-100% immediate return that's hard to match anywhere else. Many financial plans start with 'fund the match' as step one.

When does the match vest?

Varies by employer. Some match dollars vest immediately; others use a graded schedule (20% per year over 5 years) or a cliff (100% after 3 years). If you leave before vesting, unvested match dollars are forfeit. Check your plan documents.

Can I withdraw from my 401(k) before retirement?

Yes, but early withdrawals (before 59½) typically incur a 10% penalty plus income tax. Some exceptions apply (Rule of 55, SEPP/72(t), hardship). 401(k) loans are another option in most plans but carry their own tradeoffs. Generally, 401(k)s are best treated as untouchable retirement accounts.

Your 401(k)

401(k) balance over time

Contributions + match over time

How this calculator works

Why the 401(k) match matters so much

Frequently Asked Questions

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