401(k) Savings Calculator

What is a 401(k)?

A 401(k) is an employer-sponsored retirement savings plan in the United States. It allows you to contribute a portion of your paycheck, often "pre-tax," which lowers your current taxable income. Your investments grow tax-deferred until you retire and begin to make withdrawals.

The Power of the Employer Match

The single most important feature of many 401(k) plans is the employer match. This is essentially free money. A common match is "50% of your contributions up to 6% of your salary." Our calculator models this exactly.

Using that example, if you earn $80,000 and contribute at least 6% ($4,800), your employer will add an extra $2,400 (50% of $4,800) to your account. This is a 100% risk-free return on your money and dramatically accelerates your savings.

Traditional vs. Roth 401(k)

• Traditional 401(k): Contributions are pre-tax. This lowers your income tax today. Your money grows tax-deferred, and you pay ordinary income tax on withdrawals in retirement.
• Roth 401(k): Contributions are after-tax. You get no tax break today, but your money grows completely tax-free. You pay no taxes on qualified withdrawals in retirement.

This calculator projects the total value regardless of type, but remember that $1 million in a Roth 401(k) is worth more than $1 million in a Traditional 401(k) because it's all yours—no taxes due.