401K Calculator
Calculate your 401(k) growth over time. Include employer matching contributions and see how your retirement savings can grow with compound interest.
401(k) Results
Annual Summary
Key Insights
Monthly Contribution: $0
Maximize Employer Match: Contribute enough to get full match
Growth Multiple: 0.00x
Tip: 401(k)s offer tax advantages - contributions reduce taxable income
Understanding 401(k) Plans
A 401(k) is a retirement savings plan sponsored by an employer. It allows employees to save and invest a portion of their paycheck before taxes are taken out. Many employers offer matching contributions, which is essentially free money for your retirement.
Key 401(k) Features
| Feature | Description | Benefit |
|---|---|---|
| Pre-tax Contributions | Money deducted from paycheck before taxes | Reduces current taxable income |
| Employer Match | Employer contributes matching funds | Free money for retirement |
| Investment Options | Choose from various mutual funds | Control investment strategy |
| Compound Growth | Earnings grow tax-deferred | Accelerated wealth building |
| Loan Options | Borrow from your own account | Access funds in emergencies |
Contribution Limits
The IRS sets annual contribution limits for 401(k) plans. These limits are adjusted periodically for inflation.
- 2024 Employee Limit: $23,000 (plus $7,500 catch-up if age 50+)
- Total Limit (with employer match): $69,000
- Employer Match: Typically 50-100% of employee contribution up to a certain percentage
Investment Strategies
- Target Date Funds: Automatically adjust asset allocation as you approach retirement
- Index Funds: Low-cost funds tracking market indices
- Balanced Funds: Mix of stocks and bonds for moderate risk
- Individual Stocks/Bonds: For experienced investors
- Money Market: Conservative option for capital preservation
Tax Implications
- Traditional 401(k): Contributions reduce taxable income, withdrawals taxed as ordinary income
- Roth 401(k): After-tax contributions, tax-free qualified withdrawals
- Required Minimum Distributions: Must start at age 73 (or 75 if born after 1950)
- Early Withdrawal Penalties: 10% penalty plus taxes for withdrawals before age 59½
Pro Tip: Always contribute at least enough to get your full employer match - it's essentially free money. If your employer offers a Roth 401(k) option, consider your current vs. future tax situation when choosing between traditional and Roth contributions.