401k Calculator

A 401(k) account is an easy and effective way to save and earn tax deferred dollars for retirement. NerdWallet’s 401(k) retirement calculator estimates what your 401(k) balance will be at retirement by factoring in your contributions, employer matching dollars, your expected retirement age, and the growth of your investments. New to 401(k)s? Learn the basics with our 401(k) guide.

401(k) Balance at Retirement

Tax Savings
Employer Match
Investment Returns
Based on age
an income of
and current account of
You will need about
in retirement
Your 401(k) will contribute
in retirement at your current savings rate
Tweak your numbers below
Monthly 401(k) contributions

You can boost your retirement savings in just a few steps. Create an account to reduce your bills, eliminate debt and grow your money.

What is a 401(k)?

A 401(k) is a retirement plan offered by some employers. These plans allow you to contribute directly from your paycheck, so they’re an easy and effective way to save and invest for retirement. There are two main types of 401(k)s:

  • A traditional 401(k): This is the most common type of 401(k). Your contributions are made pre-tax, and they and your investment earnings grow tax-deferred. You’ll be taxed on distributions in retirement.

  • A Roth 401(k): About half of employers who offer a 401(k) offer this variation. Your contributions are made after taxes, but distributions in retirement are not taxed as income. That means your investment earnings grow federally tax-free.

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Why should I use one?

Matching dollars, for one thing. Over 90% of employers that offer a 401(k) plan also kick in a company match, which means as you contribute, your employer will, too. Commonly, that match will be worth 50% to 100% of your contributions, up to a limit that typically falls between 3% and 6% of your annual salary. If your employer offers up this free money, a good rule of thumb is to do everything you can to contribute enough to take advantage of it.

The other huge benefit of the 401(k) is that it allows you to put a lot of money away for retirement in a tax-advantaged way. The annual 401(k) contribution limit is $20,500 for tax year 2022, with an extra $6,500 allowed as a catch-up contribution every year for participants age 50 or older. For 2023, you can contribute $22,500 and those ages 50 and up can contribute an extra $7,500.

What kind of investments are in a 401(k)?

401(k) accounts often offer a small, curated selection of mutual funds. That’s a good thing and a bad thing: On the plus side, you may have access to lower-cost versions of those specific funds, especially at very large companies that qualify for reduced pricing.

The negative is that even with discounted costs, that small selection narrows your investment options, and some of the funds offered may still have higher expense ratios than what you’d pay if you could shop among a longer list of options. That can make it harder to build a low-cost, diversified portfolio.

Some plans also charge administrative fees on top of fund expenses, which can add up. If your 401(k) is expensive, contribute enough to earn your company match, and then direct any additional retirement savings contributions for the year into an IRA.

Anything else I should know?

Yep. A few things, actually.

  1. Once you contribute to a 401(k), you should consider that money locked up for retirement. In general, distributions prior to age 59½ will be hit with a 10% penalty and income taxes.

  2. If you leave a job, you can roll your 401(k) into a new 401(k) or an IRA at an online brokerage or robo-advisor. The IRA can give you more control over your account and allow you to access a larger investment selection.

  3. 401(k)s typically force you to begin taking distributions — called required minimum distributions, or RMDs — at age 72 or when you retire, whichever is later. You may be able to roll a Roth 401(k) into a Roth IRA to avoid RMDs.

Key investing definitions

Contribution limits: The IRS puts limits on the amount of money that can be contributed to 401(k)s and IRAs each year. These limits sometimes change from year to year.

Diversification: Spreading investment dollars across a range of assets (for example, stocks, bonds and cash) to cut down on your investment risk.

IRA: An individual retirement account is an investment account for retirement savings. Contributions may be tax-deductible, or withdrawals may be tax-free.

Mutual fund: An investment that pools money from many investors to buy assets such as stocks or bonds. Many 401(k) plans use mutual funds.

Portfolio: A collection of investment assets. A well-diversified portfolio might include assets such as stocks, bonds, exchange-traded funds and mutual funds.

Retirement age: The age you retire depends on you. Full Social Security benefits currently begin at age 66, but will rise to 67 for people born in 1960 and later. Early retirement benefits are available at 62, but at a lower monthly amount.

Returns: The money you earn or lose from an investment.

Risk: The possibility that an investment will perform poorly or even cause you to lose money. In general, a low-risk investment will deliver lower potential returns and a high-risk investment may deliver higher returns, but may also cause you to lose your investment.

Robo-advisor: An automated investing service or online advisor. Robo-advisors use computer algorithms and software to create and manage investment portfolios, including IRAs. They're often less expensive than human financial advisors.

Tax-advantaged: When you get tax benefits from an investment account. For example, you can make 401(k) contributions from your paycheck before tax is taken out. You don't pay taxes on those contributions or the earnings until you withdraw the money. In other accounts, such as Roth IRA, you can pay taxes on your contributions up front, then withdraw your money tax-free in retirement.