401k Calculator

401k Calculator 2025 Limits

👤 Personal Details

Current Age

Retirement Age

Annual Salary

Annual Salary Increase

Contributions

Your Contribution (% of salary)

Your Annual Contribution ($)

Employer Match (% of salary)

Employer Match Up To (% of salary)

Current 401k Balance

Expected Annual Return

💸 Tax Details

Current Marginal Tax Rate

Expected Tax Rate in Retirement

️ Disclaimer: Projections are estimates. Actual returns vary. For 2025: limit is $23,500 ($31,000 if age 50+). Consult a financial advisor.

⚖️ Traditional vs Roth 401k Comparison

Run the calculator first to see your personalised comparison. Which is better for YOU?

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Key Differences

Feature	Traditional 401k	Roth 401k

Year-by-Year 401k Growth

Run the calculator to see your year-by-year balance growth milestones.

Age	Year	401k Balance	Your Contrib. (yr)	Employer Match (yr)	Growth This Year
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How 401k Works

What is a 401k?

A 401k is an employer-sponsored retirement savings plan. You contribute pre-tax (Traditional) or after-tax (Roth) dollars, which grow tax-deferred or tax-free. Key benefits: 1. Employer match = instant 50-100% return 2. Tax-deferred growth (compounding on full amount) 3. Reduces current taxable income (Traditional) 4. High contribution limits vs IRA ($23,500 vs $7,000)

2025 Contribution Limits

Employee contribution limit: $23,500/year Age 50+ catch-up: $7,500 extra = $31,000 Age 60-63 catch-up (new!): $11,250 extra = $34,750 (SECURE 2.0 Act provision) Total limit (incl. employer): $70,000/year (employee + employer + profit sharing) IRA limit (2025): $7,000 ($8,000 if 50+)

Employer Match Explained

Most common match: 50% up to 6% of salary (= 3% of salary free if you contribute 6%+) Example: $90,000 salary, 50% match up to 6% You contribute 6%: $5,400/year Employer adds 50%: $2,700/year FREE Total going in: $8,100/year ALWAYS contribute enough to get the full match. It is a 50-100% instant return - unbeatable anywhere.

Traditional vs Roth: Break-Even Analysis

Traditional wins if: Retirement tax rate lower than current Roth wins if: Retirement tax rate same or higher Simple math (same contribution amount): Traditional: Pay taxes later on larger amount Roth: Pay taxes now on smaller amount Key: If tax rates are equal, after-tax outcome is same. Roth wins if rates go up; Traditional wins if they go down. Rule of thumb: Young earners (low bracket) = Roth Peak earners (high bracket) = Traditional

Required Minimum Distributions (RMDs)

Traditional 401k: Must start taking withdrawals at age 73 (SECURE 2.0 raised from 72 to 73 in 2023) RMD amount = Account balance / Life expectancy factor Penalty for missing RMD: 25% of amount not withdrawn Roth 401k: Has RMDs starting at 73 BUT: Can roll to Roth IRA (no RMDs) before that Roth IRA: NO required minimum distributions ever

Frequently Asked Questions

A 401k is an employer-sponsored retirement plan where you set aside a portion of each paycheck before taxes (Traditional) or after taxes (Roth). That money goes into an investment account - usually a mix of stock and bond funds - where it grows until you retire. Most employers sweeten the deal with a matching contribution: free money added to your account when you contribute. The 2025 employee limit is $23,500, or $31,000 if you're 50 or older.

Start by contributing at least enough to capture your full employer match - nothing else comes close to that guaranteed instant return. From there, aim for 15% of gross income total (your contributions plus employer match). If you're behind on retirement savings, the new SECURE 2.0 catch-up rules help: age 50–59 and 64+ can contribute $31,000 in 2025, and age 60–63 can now contribute up to $34,750 thanks to the enhanced catch-up provision.

An employer match is your company adding free money to your 401k when you contribute. The most common structure is '50% up to 6% of salary' - for every dollar you put in up to 6% of your salary, your employer adds 50 cents. On a $90,000 salary, contributing 6% ($5,400) unlocks $2,700 in employer money every year. To get the full match, you simply need to meet the contribution threshold. If you're contributing less than the threshold, you're leaving free money on the table every single paycheck.

You have four choices: roll it to your new employer's 401k (simple, same tax treatment), roll it to an IRA (more investment options, still tax-advantaged), leave it with your former employer if the balance is over $5,000 and the plan is solid, or cash it out. Cash out only as an absolute last resort - you'll owe income tax on everything plus a 10% early withdrawal penalty if you're under 59½. Rolling to an IRA is usually the most flexible long-term move since you're not tied to any employer's fund menu.

Your own contributions are always 100% yours from day one. Employer match contributions, however, typically have a vesting schedule that determines when you own them if you leave. Immediate vesting means all employer money is yours right away. Cliff vesting gives you 0% until a set date (often 2–3 years), then 100%. Graded vesting builds ownership gradually, for example 20% per year over five years. Check your plan documents - leaving before you're fully vested means forfeiting unvested employer contributions.

A 401k is offered through your employer and has a much higher contribution limit ($23,500 in 2025 vs $7,000 for an IRA). An IRA is opened individually at any bank or brokerage and gives you full control over your investment options - you're not limited to the funds your employer selected. Both come in Traditional and Roth versions. The smart order for most people: (1) contribute to 401k up to the full employer match, (2) max out a Roth IRA, (3) go back and max out the 401k.

Yes, but it's expensive before age 59½. You'll owe regular income tax on the amount withdrawn (for Traditional 401k) plus a 10% early withdrawal penalty. There are exceptions that waive the penalty: permanent disability, leaving your job at age 55 or older (the 'Rule of 55'), certain unreimbursed medical expenses, domestic relations orders (divorce), and substantially equal periodic payments under IRS rule 72(t). Hardship withdrawals are also available for immediate and heavy financial needs, though they still trigger income tax.

Traditional 401k accounts require you to start taking Required Minimum Distributions (RMDs) at age 73 - the SECURE 2.0 Act raised this from 72 starting in 2023. The IRS calculates your annual minimum withdrawal based on your account balance divided by a life expectancy factor. Missing an RMD triggers a penalty of 25% of the amount you should have taken. Roth 401k accounts technically also have RMDs starting at 73, but you can avoid this entirely by rolling your Roth 401k into a Roth IRA before that age - Roth IRAs have no required withdrawals, ever.

401k Calculator - How to Get the Most Out of Your Retirement Plan

A 401k is the single most powerful retirement savings tool available to American workers - yet most people never use it to its full potential. The difference between someone who just contributes "something" and someone who actually optimizes their 401k can easily be $300,000 to $500,000 by retirement. This calculator shows you the real numbers so you can make that difference.

Quick example: At age 32, earning $90,000, contributing 10% with a 50%-up-to-6% employer match and 7% average annual returns - you'd retire at 65 with roughly $1.2 to $1.5 million. Your employer's match alone adds over $150,000 to that. Monthly income at the 4% withdrawal rate: around $4,500–5,000 per month.

The 2025 401k Contribution Limits

The IRS adjusts 401k limits most years. For 2025, here's what you're allowed to contribute:

Under age 50: $23,500 per year
Age 50–59 and age 64+: $31,000 (standard $7,500 catch-up)
Age 60–63: $34,750 - a new higher catch-up under the SECURE 2.0 Act
Total including employer contributions: $70,000 per year

The age 60–63 enhanced catch-up is new as of 2025. If you're in that window, it's one of the most valuable planning opportunities you have right now - an extra $3,750/year in tax-advantaged savings compared to the standard catch-up.

Why the Employer Match Is the Most Important Number

Before thinking about anything else - Roth vs Traditional, fund selection, contribution percentage - make sure you're capturing your full employer match. It's the highest guaranteed return available in personal finance, full stop.

The most common match structure is "50% up to 6% of salary." On a $80,000 salary, that means contributing 6% ($4,800) triggers $2,400 of free employer money. That's a 50% instant return before any investment growth. Not capturing it is the retirement equivalent of turning down a raise.

Traditional 401k vs Roth 401k - Which One Wins for You?

The honest answer: it depends entirely on whether your tax rate in retirement will be higher or lower than it is today.

Choose Traditional 401k if you're...

In the 24% tax bracket or higher today
Expecting lower income (and lower taxes) in retirement
Wanting to reduce your taxable income right now
Within 10–15 years of retirement
In a high-income-tax state

Choose Roth 401k if you're...

Early in your career in the 10–22% bracket
Expecting tax rates to rise (yours or generally)
Wanting tax-free income in retirement
Planning to avoid Required Minimum Distributions
Leaving retirement assets to heirs

The safest strategy for most people - especially with 20+ years until retirement - is to split contributions between both. Some Traditional, some Roth. This gives you tax diversification and the flexibility to draw from whichever account is most efficient in any given retirement year, regardless of how tax law changes between now and then.

How Much Should You Actually Contribute?

The most commonly cited target is 15% of gross income for retirement savings, including your employer's contribution. But the order of operations matters more than the total percentage:

Contribute enough to your 401k to get the full employer match - this comes first, always
Max out a Roth IRA ($7,000 in 2025) - more investment options, same tax advantages
Go back and max out your 401k ($23,500 in 2025)
If you have more to invest, use a taxable brokerage account

What Happens to Your 401k When You Leave a Job?

Your 401k balance belongs to you. When you leave, you have four options. Rolling to an IRA is usually the best move - you get broader investment choices, the same tax treatment, and you consolidate your retirement accounts. Rolling to your new employer's 401k is also good if the new plan has solid, low-cost options. Leaving it with your old employer works if the balance is above $5,000 and the plan is decent. The one option to avoid unless absolutely necessary: cashing out. You'll owe income tax on the full amount plus a 10% early withdrawal penalty if you're under 59½.

Vesting: When Is the Employer Match Actually Yours?

Your own 401k contributions are yours immediately, always. The employer match, however, may be subject to a vesting schedule - meaning you have to stay for a set period before those funds are truly yours to take if you leave.

Common schedules: immediate (all match is yours from day one), cliff vesting (0% until year 2–3, then 100%), and graded vesting (ownership accrues 20% per year). Always check your vesting schedule before resigning - leaving before you're fully vested means leaving employer money behind.

How this calculator works, and where the numbers come from

The 401k Calculator applies the standard formula for this calculation to the values you enter and updates the result as you type. The calculation itself happens in your browser, and the page explains the method so you can check any result by hand.

Please note: Projections assume the inputs you enter stay constant; real returns vary. Results are estimates, not financial advice.

Sources and further reading

Learn more

Read our guide: Compound Interest and the Rule of 72, Checked Against the Math

Last reviewed: October 6, 2026 by the CalcQube Editorial Team. See our editorial policy for how we build and check calculators, or report an error.