401K Savings Calculator


Below, you can learn about 401(k) savings accounts and how to use our calculator to set up your post-retirement life effectively.

How Does The 401K Savings Calculator Work?

A 401(k) savings account is an essential tool for any American to secure a comfortable life post-retirement. It works by setting aside a fixed percentage of your salary every month. By the time you retire, you will have a comfortable amount of savings to fall back on. Moreover, many companies have to match your contribution to a certain amount that is part of company policy. This employer match amount is not a part of your gross pay, so there is practically no downside to opting for a 401(k) plan. The cherry on top is that the money that goes into this account is tax-deferred, meaning that it will not be considered when calculating your taxes.

Our 401(k) savings calculator promises to help you find out how big your retirement package will be under a given plan. It takes several factors into account, such as your age when you open the account, how much your salary increases by every year, and your employer match percentage. More importantly, it considers the rate of return, which dictates how much your investment will grow. For 401(k) plans, the rate of return is usually stable over extended periods, so it is safe to assume a constant rate. We have explained each section below.

Current Age

The first section is where you key in your current age or your age when opening the savings account. The earlier you open an account, the more you will save by the time you retire.

Age At Retirement

In the next section, specify when you plan to retire. The current official age of retirement with full benefits is roughly 66 years. However, you can set any age according to your plans. As mentioned earlier, the longer the account is open, the more money you will have to fund your post-retirement plans.

Current 401(k) Balance

This option lets you calculate your savings mid-plan, in case any of the specifics get changed. For example, the annual rate of return might fluctuate due to market conditions. Or you might earn a higher pay raise than you initially expected. Also, you can choose to start the account with an initial deposit. If not, type 0.

Current Annual Salary

In this section, mention your gross annual salary – excluding any deductions such as taxes. This detail is important as the contributions to your 401(k) savings account are exempt from taxes. Your employer is a part of your savings plan. So do not include any income you earn from side-hustles and the like.

Annual Increase in Salary

This section is about the pay raise you receive annually. Many corporate businesses have fixed schemes regarding this, so the calculator should do just fine. However, if you do earn a higher or lower raise any year, you can make specific calculations by adjusting Current Age and Current 401(k) Balance. Check out our handy pay raise calculator if you are at a loss about how much of a raise to expect.

Salary To Contribute

Here, you have to decide how much of your salary you want to put in your 401(k) account every month. This amount depends on how much of your salary you need to have on hand, depending on factors like the cost of living. Also, some companies have rules regarding this, so make sure to look up your employer’s policies. Besides, IRS also imposes a limit – as of 2020, you can contribute up to $19,500 a year to your 401(k) savings account. This value usually is constant for the whole period.

Employer Match & Max Employer Contribution

The next two sections are related to each other. Your employers are required by specific rules to contribute to your savings account. Depending on the region and industry you work in, they may opt not to contribute too. The Employer Match section specifies how large a contribution they are willing to make. In our calculator, you determine this value as a percentage of your e contribution. The employer match amount is almost always capped, however. This scenario is where the next section comes in. Here, you mention how much of your contribution your employers take into consideration.

For example, let’s say you make an annual salary of $50,000 and contribute 10% to your 401(k) account. That equals a contribution of $5,000. Now, your employer has promised a match of 50%. This provision should mean they contribute $2,500, but their contribution is capped at 5%(Max Employer Contribution). This ruling means that they pay 50% of the first 5% of your annual salary, which is $1,250.

Annual Rate of Return

The annual rate of return is the amount by which you can expect your money to grow. This growth is affected by many factors, such as the company’s performance and market conditions. The amount gained is then compounded annually. Our calculator assumes a constant rate of return. However, if the rate were to change, you can make modified calculations by adjusting other parameters.

Payments Per Year

This section specifies how often you make deposits in the account. The most common setup involves monthly deposits, meaning 12 payments a year.


Once you fill all the sections, you will receive a list of different results, including your net worth after the period, assuming no change in value apart from the savings account. You will also find out how much your salary will be just before you retire. You will also get a split-up of your contributions and your employer’s contributions. Last but not least, you will know the final balance of your 401(k) account.


Setting aside assets to support your post-retirement life is quite essential, and a 401(k) savings account is an easy way to take care of this responsibility. Calculating where you might end up isn’t always easy, though, and we hope you found our calculator useful in that aspect. If you have other financial woes to be taken care of, have a look at our complete collection of financial and business calculators.