How to Use This 401(k) Calculator
Planning for retirement is one of the most important financial decisions you can make. Our Advanced 401(k) Calculator helps you visualize your future savings by taking into account your current balance, salary contributions, and most importantly, your employer's match.
Why Employer Match Matters?
Many employers offer to match a percentage of your 401(k) contributions. This is essentially "free money" that compounds over time. For example, if you earn $50,000 and contribute 5%, and your employer matches 3%, that's an extra $1,500 invested in your future annually without affecting your take-home pay.
Frequently Asked Questions (FAQ)
Historically, the stock market has returned about 10% annually before inflation. However, for conservative planning, financial advisors often recommend using a rate between 6% and 8% to account for inflation and market volatility.
A common rule of thumb is to save 10% to 15% of your income. At a minimum, you should contribute enough to get the full employer match offered by your company.
You can adjust the "Annual Return" slider. To calculate in "today's dollars," subtract the expected inflation rate (e.g., 3%) from your expected investment return (e.g., 8%) and use 5% as your input.