401k Growth Calculator
401k Contributions, Employer Match, and the Power of Tax-Deferred Growth
The 401k is the most common retirement savings vehicle in America — and the one most people are leaving money on the table with. A 2023 Vanguard survey found that only 14% of eligible plan participants contributed the maximum allowed amount. Meanwhile, nearly 20% contributed less than enough to capture their full employer match.
Why Your Employer Match Is the Highest-Return Investment You'll Ever Make
A 50% match up to 6% of salary is a guaranteed 50% return on the first 6% of your contribution — before any market returns. For someone earning $78,000, that's $2,340 in free money each year. Invested at 7% for 25 years, that match alone grows to over $155,000. Skipping it to take home an extra $45/paycheck is one of the costliest financial decisions a worker can make.
Understanding 2024 Contribution Limits
The IRS set the 2024 employee elective deferral limit at $23,000. Workers 50 and older can contribute an additional $7,500 as a catch-up contribution, for a total of $30,500. The combined employee + employer limit is $69,000. These limits tend to increase by $500 increments each year — setting up automatic annual increases in your contribution keeps you on track without having to think about it. Use the full retirement calculator to see how your 401k feeds into your complete retirement picture, and pair it with a Roth IRA strategy for tax diversification.
One Common 401k Mistake That Costs Thousands
Cashing out your 401k when you change jobs. On a $35,000 balance, a 30-year-old taking a cash distribution loses roughly $8,750 to the 10% penalty plus income taxes — and surrenders the $267,000 that sum would have grown to by age 65 at 7%. Rolling over to your new employer's plan or to an IRA takes about 20 minutes and preserves every dollar. See the retirement income calculator to understand how your 401k balance converts to monthly income in retirement, and the early retirement calculator if you're exploring leaving the workforce before 60.
401k FAQs
How do I calculate my 401k balance at retirement?
Use the compound interest formula: FV = P(1+r)^n + C×[((1+r)^n−1)/r], where P is your current balance, r is your monthly return rate (annual return ÷ 12), n is months to retirement, and C is total monthly contribution including employer match. Our 401k calculator handles this automatically — just enter your inputs and hit Calculate.
For a rule-of-thumb check: money invested at 7% doubles roughly every 10 years (the Rule of 72). So $50,000 today becomes $100,000 in 10 years, $200,000 in 20, and $400,000 in 30 — before adding any new contributions.
What is a good 401k balance by age?
Fidelity's benchmarks: 1× salary by 30, 3× by 40, 6× by 50, 8× by 60, and 10× by 67. The median 401k balance for Americans 55–64 is approximately $134,000 — well below these targets. If you're behind, catch-up contributions ($7,500 extra per year after 50) and reducing current spending to increase contributions are the two most effective levers. See the retirement savings calculator to model catch-up scenarios.
What is the 401k contribution limit for 2024?
The 2024 employee elective deferral limit is $23,000. Workers 50 and older can contribute an additional $7,500 catch-up, for a total of $30,500. The combined employer + employee limit is $69,000 ($76,500 with catch-up). Employer matching never reduces your personal contribution room — even if your employer contributes $10,000, you can still contribute the full $23,000 yourself.
Should I choose a Roth 401k or traditional 401k?
A traditional 401k reduces your taxable income today but taxes withdrawals in retirement. A Roth 401k uses after-tax money but all growth and withdrawals are tax-free. The right choice depends on whether your tax rate will be higher now or in retirement. Many planners recommend splitting — especially since unlike Roth IRAs, Roth 401ks have no income limits. Use the Roth IRA calculator alongside this tool to model both scenarios.