401(k) Retirement Calculator
Estimate your retirement savings with our comprehensive 401(k) calculator. Plan your future with accurate projections.
Disclaimer: This calculator provides estimates only and should not be considered financial advice. Many factors will impact your actual retirement savings. Consult with a qualified financial advisor for personalized guidance.
Last updated: February 2025. Contribution limits and tax laws may have changed since this update.
Understanding Your 401(k) Retirement Plan
401(k) Basics
A 401(k) is a tax-advantaged retirement account sponsored by your employer. Contributions are typically made with pre-tax dollars, reducing your current taxable income.
Key benefits include:
- Tax-deferred growth
- Employer matching contributions
- Higher contribution limits than IRAs
- Potential Roth 401(k) options
- Protection from creditors
Maximizing Your 401(k)
Make the most of your 401(k) with these strategies:
- Contribute enough to get the full employer match - This is essentially free money
- Increase contributions gradually - Try to increase by 1% each year
- Take advantage of catch-up contributions - If you're 50 or older
- Review your investment allocation - Make sure it aligns with your risk tolerance and time horizon
- Avoid early withdrawals - These typically come with penalties and tax consequences
Frequently Asked Questions
What is the 4% rule for retirement withdrawals?
The 4% rule is a guideline suggesting that you can withdraw 4% of your retirement savings in the first year, and then adjust that amount for inflation each year, with a high probability that your money will last for 30 years. It's a simplified rule of thumb and your actual safe withdrawal rate may vary based on market conditions and personal circumstances.
What are catch-up contributions?
Catch-up contributions allow individuals aged 50 and older to make additional contributions to their 401(k) accounts beyond the standard limit. For 2025, the catch-up contribution limit is $6,500, bringing the total possible 401(k) contribution to $29,500 for eligible participants.
What happens to my 401(k) if I change employers?
When you change jobs, you typically have several options for your 401(k): leave it with your former employer (if allowed), roll it over to your new employer's plan, roll it over to an IRA, or cash it out (not recommended due to taxes and potential penalties). A direct rollover is usually the best option to avoid tax complications.
How is my 401(k) taxed in retirement?
Traditional 401(k) withdrawals are taxed as ordinary income in retirement. You'll pay federal income tax and possibly state income tax depending on where you live. Roth 401(k) withdrawals are generally tax-free in retirement. You'll pay federal income tax and possibly state income tax depending on where you live. Roth 401(k) withdrawals are generally tax-free in retirement if you've had the account for at least five years and are at least 59½ years old.
What's the difference between a 401(k) and an IRA?
Both are retirement accounts, but 401(k)s are employer-sponsored with higher contribution limits ($23,000 in 2025), potential employer matching, and limited investment options. IRAs are individual accounts with lower contribution limits ($7,000 in 2025), no employer matching, but typically offer more investment options. Many people use both to maximize retirement savings.