401k/Retirement Calculator

How Retirement Savings Grow Over Time

Retirement savings grow through the power of compound interest -- your investment returns generate their own returns over time. The earlier you start saving, the more time your money has to compound. This calculator projects your retirement balance by factoring in your current savings, annual contributions, employer matching contributions, and expected investment returns.

Understanding Employer Match

Many employers offer a 401(k) match, which is essentially free money added to your retirement account. A common match is 50% of your contributions up to 6% of your salary, or a dollar-for-dollar match up to a certain percentage. This calculator lets you input your employer match percentage and a cap on matched contributions to give you a realistic projection.

What Return Rate Should I Use?

The historical average annual return of the S&P 500 is roughly 10% before inflation and about 7% after inflation. A 7% return rate is a commonly used assumption for long-term retirement planning with a diversified stock portfolio. More conservative portfolios (bonds, CDs) may use 4-5%, while aggressive portfolios might assume 8-10%.

Frequently Asked Questions

How much should I save for retirement?

A common guideline is to save 10-15% of your gross income for retirement. Financial advisors often recommend having 1x your salary saved by age 30, 3x by 40, 6x by 50, and 8-10x by retirement age 67. Use this calculator to see if your current savings pace is on track.

Does this account for inflation?

This calculator shows nominal (non-inflation-adjusted) values. To estimate in real (inflation-adjusted) dollars, use a return rate reduced by expected inflation -- for example, use 5% instead of 7% if you expect 2% annual inflation.