How to Use a 401(k) Calculator

Before You Start

• Current account balance and age at year end.
• Target retirement age and current annual salary.
• Employee payroll-deferral percentage.
• Employer match rate and the salary percentage eligible for matching.
• Plan fees and an expected return range.
• Current plan and IRS limits applicable to the selected year.

Step 1: Enter Age, Retirement Age, and Salary

Current age controls catch-up eligibility. Retirement age sets the number of annual contribution periods. Enter gross annual compensation relevant to the plan and a salary-growth assumption used once per modeled year.

The engine caps eligible compensation at the entered compensation limit before calculating employee contributions and employer matching.

Step 2: Enter Contributions and Employer Match

Enter the percentage of eligible salary contributed by the employee. Then describe the illustrative employer formula. A 50% match up to 6% means 50 cents per eligible employee dollar until those employee deposits reach 6% of eligible compensation.

The result estimates first-year employee deposits, match, and any missed match. It does not reproduce payroll-by-payroll matching or a year-end true-up.

Step 3: Review Editable Limits

The defaults use the 2026 limits: $24,500 employee deferral, $8,000 age-50 catch-up, $11,250 catch-up at ages 60 through 63, $72,000 annual additions, and $360,000 compensation.

The year and dollar amounts are editable. Entering another year does not automatically load that year's law; update every limit from authoritative guidance and your plan documents.

Step 4: Enter Growth, Fees, Inflation, and Goal

Enter the expected effective annual return, annual investment fee, inflation rate, target balance, withdrawal-rate assumption, return range, and contribution timing. Enable catch-up modeling only when appropriate for the plan.

The withdrawal-rate output is a simple ending-balance percentage divided by 12. It does not test taxes, longevity, market sequence, or distribution rules.

Step 5: Read the Results

1. Projected balance: nominal value at retirement after deposits, gross return, and fees.
2. Employee contributions: modeled payroll deferrals after entered caps.
3. Employer match: illustrative deposits under the entered formula.
4. Missed match: first-year match not captured under the entered employee rate.
5. Investment growth: ending balance minus current balance and all modeled deposits.
6. Fee drag: fee-free ending balance minus the projection with fees.
7. Goal result: surplus or gap and solved employee contribution rate.
8. Estimated monthly income: ending balance times the entered withdrawal rate divided by 12.

Worked Example: $100,000 Salary and 50% Match

The default starts at age 35 with $75,000, a $100,000 salary, a 10% employee rate, and a 50% employer match up to 6% of salary.

These amounts use the production engine and update automatically if the shared defaults change.

Step 6: Stress-Test the Plan

• Compare a lower return and higher fee.
• Reduce salary growth or employer match.
• Test an earlier retirement date.
• Review results with and without catch-up contributions.
• Compare the target in nominal and today's dollars.
• Change one assumption at a time.