What is a 401(k)?
A 401(k) is a workplace retirement savings plan. You direct part of your pay into investments offered by your plan, and your employer may add matching contributions. Your balance depends on deposits, market performance and costs. Your plan document determines eligibility, matching and vesting.
How does this 401(k) calculator work?
The projection begins with a full 2026 working year. Enter the age you reach by December 31, 2026. It projects one full year for each age before your retirement age, then stops before contributions at that age. Equal current and retirement ages means no new contributions or growth. This is not a remaining-months forecast for 2026.
For year n, salary = starting salary × (1 + salary increase)n. Eligible compensation is the smaller of that salary and $360,000. Requested employee deferral = eligible compensation × employee contribution rate. Regular deferrals and age-based catch-ups are capped separately. The annual match uses actual capped employee contributions, including catch-ups, and is limited by the remaining annual-additions allowance.
Monthly formula: monthly growth factor = [(1 + annual return) × (1 − annual fee)]1/12. Each month, new balance = prior balance × monthly growth factor + (annual employee deferral + annual employer match) ÷ 12. Deposits occur at month-end. Salary changes once per year; contribution limits are reapplied every year. Calculations retain precision internally; displayed currency rounds to cents.
Purchasing power = retirement balance ÷ (1 + inflation)years. Final annual salary is the last working year’s salary, or current salary if there are no working years. Growth is the residual after subtracting the initial balance and all new contributions.
Traditional vs Roth 401(k)
Traditional contributions generally reduce current taxable income, with withdrawals generally taxable later. Roth contributions use after-tax pay; qualified withdrawals can be tax-free. Choosing a type here labels regular employee contributions and does not change investment returns. Equal dollars invested yield equal projected account balances. Employer contributions are not automatically Roth. The calculator does not estimate take-home pay, withdrawal taxes or qualified-distribution eligibility.
How employer matching works
A $60,000 salary with a 6% employee contribution produces $3,600 of employee savings. A 50% match on contributions up to 6% of salary adds $1,800 from the employer, before any applicable limits. Increasing the employee rate above the match limit does not earn more match under this formula. A zero matching rate means no employer deposits. Actual plans can use tiers, waiting periods, per-paycheck caps or annual true-ups; this model assumes a uniform annual formula and full vesting.
2026 IRS contribution limits
The 2026 regular employee deferral ceiling is $24,500 across Traditional and Roth combined. Eligible participants age 50 or older at calendar year-end can add $8,000; ages 60–63 instead use $11,250. The higher catch-up ends at age 64. This model assumes the plan allows these contributions. The combined regular employee and employer ceiling is the smaller of $72,000 and 100% of compensation, excluding catch-ups. Eligible compensation is capped at $360,000. Employee catch-ups cannot exceed remaining compensation. IRS contribution limits and compensation rules.
From 2026, catch-ups must be Roth for certain participants whose prior-year wages from the sponsoring employer exceeded $150,000. We do not collect prior-year FICA wages or classify each catch-up for tax purposes; the projection assumes Roth catch-ups are available where required. Confirm eligibility and tax treatment with your plan administrator. IRS catch-up eligibility and Roth requirements.
Future-year assumption: all dollar ceilings and the compensation cap stay fixed at verified 2026 values. Future IRS adjustments are unknown in this model, even as salary grows. Age eligibility changes annually. Frozen limits are a planning assumption, not official future limits. IRS annual adjustment table. Rules checked October 30, 2026.
How much should you contribute?
Compare a few rates alongside your current budget. If your employer offers matching, check the contribution needed to receive it. Balance retirement saving against essential spending, emergency reserves and debt obligations. The largest permitted contribution is not automatically the right choice for your circumstances.
The impact of compound growth
Investment earnings can themselves earn returns over time. Starting earlier gives each contribution more time to compound, although losses can also compound. Compare a cautious return with your main assumption rather than relying on one smooth growth path.
How investment fees affect retirement savings
Fees reduce the assets available for future growth. This calculator applies a percentage fee to assets through the monthly growth factor. Try a higher and lower fee while keeping other inputs fixed. Fixed account charges, transaction costs and fees already embedded in a quoted net return are not separately modeled; avoid counting the same fee twice.
Limitations of retirement projections
This is an illustration, not an investment recommendation or a guarantee. It assumes constant annual returns, continuous employment, full vesting, equal monthly deposits, all salary eligible for deferral up to the compensation cap, and no withdrawals, loans, rollovers or additional employer deposits. Actual market paths and deposit timing differ. Other workplace-plan deferrals, nondiscrimination testing, lower plan limits, employer deduction limits, SIMPLE plans and self-employed or solo 401(k) rules are not modeled. Check your plan’s limits and aggregate deferrals across employers. The graph shows account value before any withdrawal taxes and does not model retirement income or required distributions.
When net growth is negative, the breakdown displays signed amounts instead of a doughnut. The starting balance is shown separately so the components always reconcile with the projected balance.
Frequently asked questions
Does my employer match count toward the employee limit?
No. Employer contributions do not use the employee elective-deferral ceiling. They do count with regular employee contributions toward the separate annual-additions ceiling, while eligible catch-ups sit outside that ceiling.
Can I contribute to both a Traditional and a Roth 401(k)?
If your plan offers both, you may split employee deferrals between them, sharing the same employee ceiling. This calculator models one combined contribution rate; its type selection does not create an extra limit.
What happens when I reach age 50 or age 60?
The model checks your age in each projected calendar year. It adds the standard catch-up at age 50, substitutes the larger catch-up for ages 60 through 63, and returns to the standard catch-up from age 64.
Why does raising my contribution rate sometimes stop changing the result?
Your requested contribution may already exceed the modeled employee or compensation ceiling. The calculator caps the actual deposit and reports how many projection years are limited.
Will my retirement balance be tax-free?
That depends on contribution tax treatment and withdrawal eligibility. A projected account balance is not an after-tax spending amount. No withdrawal taxes are estimated here.
Can the calculator show investment losses?
Yes. Enter a negative annual return, or a fee that exceeds growth. Net growth can be negative even while new contributions keep the total balance positive.
What does today’s dollars mean?
It discounts the projected balance using your inflation assumption. It describes estimated purchasing power, not a second account balance or an inflation guarantee.
Why do the charts include my starting balance?
Your existing savings also contribute to the final account value. The doughnut includes a separate starting-balance segment, alongside new employee deposits, employer deposits and net growth.
Are future IRS limits predicted?
No. Every projected year reuses the verified 2026 dollar ceilings. Actual future limits and plan rules may change. Update your projection when new official limits become available.