401(k) Calculator – Growth, Limits & Roth vs Traditional
This 401(k) Calculator models the long-term growth of retirement savings, estimates how contributions accumulate with employer match, checks whether contributions fall within IRS rules, and compares the potential after-tax value of a Traditional 401(k) versus a Roth 401(k). The calculator is structured for financial planning, allowing you to test contribution levels, investment return assumptions and retirement timelines in a single, flexible framework.
What This 401(k) Calculator Does
Because retirement planning involves several moving parts—income, tax treatment, contribution rules, employer policies and expected investment returns—this tool separates the analysis into three focused modes:
- 401(k) Growth Projection: Estimate your total balance at retirement under a range of contribution and return assumptions.
- Contribution Limit Checker: Evaluate whether your planned employee contributions stay within IRS contribution ceilings.
- Traditional vs Roth Analysis: Compare after-tax values at retirement based on future tax rates.
Together, these modules provide a comprehensive view of how your retirement savings develop, whether you are optimizing for tax efficiency, long-term asset growth or annual compliance.
How the 401(k) System Works
A 401(k) is an employer-sponsored retirement plan in which employees contribute a portion of their paycheck into a tax-advantaged account. Employers may contribute through matching or profit-sharing policies. The plan grows through investment returns, usually in equities, bonds or managed portfolios.
Traditional 401(k) vs Roth 401(k)
- Traditional 401(k): Contributions lower taxable income today. Withdrawals in retirement are taxed as ordinary income.
- Roth 401(k): Contributions are made with after-tax income. Withdrawals in retirement are tax-free if conditions are met.
The calculator allows you to compare these options numerically by assuming different tax rates now and at retirement, helping you determine which structure offers the larger net benefit.
Core 401(k) Growth Formula
The calculator uses the standard future value formula for compound contributions:
- FV = future value at retirement
- PV = current balance
- PMT = contribution per period
- r = periodic investment return (annual rate ÷ 12)
- n = number of monthly periods until retirement
This structure allows the calculator to model both employee and employer contributions, along with long-term compound growth.
Employer Match Modeling
Many employers offer matching contributions based on a percentage of salary. For example:
- 50% match on up to 6% of salary
- 100% match up to 4%
- Tiered matching frameworks
The growth model treats employer match as part of monthly contributions, compounding alongside employee deposits. In this way, the calculator reflects the true value of employer-sponsored retirement plans, particularly when contributions span multiple decades.
The Role of Contribution Limits
Employee 401(k) contributions are subject to annual limits that adjust periodically. In addition, individuals aged 50 or older may contribute an additional “catch-up” amount. Employer contributions do not count toward the employee limit but do contribute to the combined total limit.
The calculator's limit checker is time-neutral: instead of referencing a specific year, it allows you to insert the current limits manually. This ensures long-term accuracy even as IRS thresholds change annually.
Traditional vs Roth 401(k) Analysis
Determining whether a Traditional or Roth 401(k) provides superior long-term value depends on the relationship between current and future tax rates. The calculator models this by:
- Simulating growth without tax friction for both accounts
- Applying taxes either at contribution (Roth) or retirement (Traditional)
- Calculating after-tax value for direct comparison
This approach offers a clear, numerical perspective on decisions that may otherwise be guided only by assumptions.
How to Use the 401(k) Growth Mode
Begin with the Growth tab to see how your balance evolves from now until retirement. You will enter:
- Current age and retirement age
- Current 401(k) balance
- Annual salary
- Employee contribution percentage
- Employer match percentage
- Expected annual investment return
The output includes:
- Projected retirement balance
- Total contributions (employee + employer)
- Compound growth amount
- Years until retirement
- Estimated monthly retirement income using a 4% withdrawal rate
For more detailed long-term retirement modeling, see the Retirement Calculator.
How to Use the Contribution Limit Checker
Contribution limits depend on age and IRS regulations. In this section, you can enter:
- Your age
- Planned employee contributions
- Employer contributions
- Current employee limit
- Catch-up amount (if applicable)
The calculator then determines:
- Your total annual contribution
- Remaining contribution allowance
- Whether your planned contributions exceed IRS limits
- Status summary explaining compliance
Although limits change periodically, using the tool with up-to-date thresholds ensures accurate planning.
Using the Roth vs Traditional Comparison
The third tab compares the two 401(k) structures by incorporating:
- Current age and retirement age
- Contribution amounts
- Investment return assumptions
- Current and future tax rates
The model generates:
- Traditional 401(k) total balance
- Traditional 401(k) after-tax retirement value
- Roth 401(k) retirement balance
- Difference between Roth and Traditional outcomes
This allows you to analyze long-term tax efficiency with clear, quantifiable results.
Investment Return Assumptions
Long-term investment returns in retirement accounts are typically modeled using annual rates of 5% to 9%, depending on portfolio composition. The calculator uses monthly compounding:
Adjusting return assumptions allows you to evaluate conservative and aggressive investment strategies, including comparisons between traditional portfolios, diversified index funds and balanced asset allocations.
The Impact of Starting Early
Because 401(k) growth compounds over many years, early contributions have disproportionate long-term effects. Two employees with identical salaries may end with significantly different balances depending solely on when they began contributing.
For compound growth modeling, see the Compound Interest Calculator.
Adjusting for Salary Changes
Some savers prefer percentage-based contributions because they automatically scale with salary increases. The calculator supports this structure by deriving contribution amounts directly from annual salary inputs.
If you wish to compute after-tax salary figures or estimate real take-home pay, use the Salary Calculator.
Portfolio Allocation Considerations
While the calculator models growth using a single return rate, actual portfolio performance depends on allocation. For example:
- Higher equity exposure: Higher expected return, greater volatility.
- Balanced mix: Moderate risk and return.
- Bond-heavy structure: Lower risk, lower expected return.
Adjusting the expected return in the calculator allows you to test various allocation strategies to see how they influence long-term outcomes.
Additional 401(k) Planning Considerations
- Vesting schedules: Employer contributions may vest over time.
- Withdrawal rules: Traditional 401(k) withdrawals are taxable; Roth withdrawals may be tax-free.
- Required Minimum Distributions (RMDs): Traditional accounts require withdrawals beginning at a certain age.
- Loan provisions: Some employers allow 401(k) loans, which reduce long-term growth.
- Early withdrawal penalties: Withdrawals before qualifying events may incur penalties.
While these factors are not modeled directly in the calculator, understanding them helps create a well-informed retirement strategy.
Conclusion
This 401(k) Calculator brings together the essential components of retirement planning—compound growth, contribution limits and tax structure comparison—into one practical tool. Whether you are analyzing the advantage of employer match, determining the optimal employee contribution or comparing the after-tax value of Traditional and Roth contributions, the calculator provides a comprehensive, time-neutral framework for informed decision-making.
Because it allows you to test multiple scenarios quickly, this tool is a valuable resource for evaluating long-term financial outcomes and designing a retirement strategy that fits your personal goals and tax situation.
Frequently Asked Questions
This calculator estimates the projected value of your 401(k) at retirement, checks your annual contribution limits, and compares Traditional versus Roth 401(k) outcomes using adjustable return and tax assumptions.
The tool provides simplified projections based on annual return, contribution percentage, employer match, and tax inputs. While it works for most standard 401(k) plans, certain employer-specific rules such as vesting schedules, profit-sharing, or tiered match formulas may not be included.
The projection uses monthly compounding and applies employee contributions, employer match, and investment returns each period. It calculates future value using the standard compound interest formula combined with recurring contributions.
Yes. You can enter the employer match as a percentage of salary in the growth tab. The calculator adds it automatically to your total monthly contributions during the projection period.
Yes. The Contribution Limit Checker compares your planned annual employee contribution with the current IRS employee limit, and includes the additional catch-up allowance if you are age 50 or older.
The Traditional vs Roth comparison estimates after-tax value for both account types. Traditional 401(k) projections are shown before and after retirement tax, while Roth projections show tax-free value assuming contributions were made after tax.
The calculator does not adjust for inflation directly. Results are presented in nominal dollars. If you want to model inflation-adjusted income, you can reduce the expected investment return by estimated long-term inflation.
It is ideal for planning, comparison, and estimating retirement readiness. However, final decisions about investments, tax planning, or withdrawal strategies should be reviewed with a financial advisor or tax professional.