401(k) Calculator

Each year the balance grows at one twelfth of the annual return per month, with your contribution and the employer match added monthly. The match is the smaller of what you contribute and the plan cap, multiplied by the match rate: match = min(yourPercent, cap) x matchRate x salary. Your salary is raised each year, so the contributions grow with it.

What does "50 percent of the first 6 percent" mean?

Your employer adds 50 cents for every dollar you contribute, but only on the first 6 percent of your salary. Contribute 6 percent and you get 3 percent free. Contribute 10 percent and you still only get 3 percent - the extra 4 is unmatched.

How much should I put in my 401(k)?

At minimum, enough to collect the whole match, because nothing else returns 50 or 100 percent instantly. Beyond that, a common target is 15 percent of salary including the match.

Does contributing lower my take-home pay by the same amount?

No. Traditional 401(k) contributions come out before federal income tax, so a 300 dollar contribution in the 22 percent bracket reduces take-home by about 234. A Roth 401(k) is taken after tax, so there the full amount comes off.

What are the contribution limits?

The IRS sets an employee deferral limit each year, with an extra catch-up amount allowed from age 50. Employer match does not count against the employee limit. Check the current year figure on irs.gov, since it is adjusted for inflation annually.

What happens if I change jobs?

Your own contributions are always yours. Employer match may be on a vesting schedule, so some of it can be forfeited if you leave early. The balance can usually be rolled into a new employer plan or an IRA without tax.