401(k) Calculator
Model a 401(k) the way it actually works: your contribution percentage, salary growing yearly, and a two-tier employer match (100% of the first slice, 50% of the next) — with the deposit-timing convention printed.
The match is a second salary for the same saving
A 401(k) has three engines: your contributions, your employer's match, and time. The match — here modeled in its common two-tier form (100% of the first 3% of salary, 50% of the next 2%) — is an instant 100%/50% return on the matched slice before markets move at all. The result panel isolates its value so you can see what walking past it costs.
Each year: balance × (1 + return) + salary × (your % + match %) — contributions at year end
Example: $10,000 saved, $60,000 salary rising 3% a year, contributing 10%, matched 100% of the first 3% plus 50% of the next 2%, at 7% for 30 years: the balance reaches $1,164,970.99. Without the match, the identical habit ends near $990,000 — the match alone was worth roughly $175,000.
The timing convention, printed as promised
Real 401(k) money goes in every payday. Annual models must choose: this calculator adds each year's contributions at the end of the year, after growth — the conservative convention, and the result states it. Deposits at each year's start would finish higher (the result panel computes that figure too) — same saving, different bookkeeping, and the gap is why conventions are printed rather than assumed.
How this is calculated
Year-by-year simulation. Salary grows at your rate each year after that year's contribution is set. Employee contribution = salary × your %. Match = salary × [match1% × min(your %, cap1) + match2% × the slice of your % between cap1 and cap1 + cap2] — the standard two-tier structure; unused match capacity does not carry. Contributions are added at year end (a beginning-of-year variant is computed for the comparison line). Returns are constant; taxes, loans, hardship withdrawals and plan fees are outside the model.
Frequently asked questions
How much should I contribute?
At minimum, enough to capture the entire match — declining it is declining pay. Beyond that, the answer is a tax-and-budget question; contribution limits set by the IRS (indexed yearly) cap the tax-advantaged amount.
What if my employer's match is different?
Enter your plan's actual tiers in the four match fields — a single-tier match (say 50% of the first 6%) is match 2 set to 0. A plan with no match is both matches at 0, and the comparison line then shows zero, correctly.
Does the projection include vesting?
No — the model assumes the match is yours. If your plan vests over years and you may leave early, discount the match line mentally by the unvested share.
401(k) or IRA first?
The standard ordering advice: contribute to the 401(k) up to the full match, then an IRA (often better fund choices), then back to the 401(k). The match-first step is the only part that is close to universal.
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