401(k) Growth Calculator

401(k) Growth Calculator: how it works (and how to use it like a pro)

A 401(k) is one of the most powerful wealth-building tools available to many employees in the U.S. because it combines consistent contributions, potential employer match, and tax advantages. The catch is that 401(k) growth feels “slow” at first — and then suddenly gets dramatic. That’s compounding.

This calculator is designed to be Omni-level useful: it breaks your balance into three buckets — your contributions, employer match, and investment growth — and estimates a year-by-year path so you can sanity-check whether your plan is on track. You can also include annual raises and fees, because a tiny fee difference or a small contribution increase can create a surprisingly large gap over 20–30 years.

The core idea: balance = start + contributions + growth

Your 401(k) balance changes for only three reasons:

• Starting balance: what you already have invested.
• New money added: your payroll contributions plus any employer match.
• Investment growth (or loss): the return your invested money earns over time, after fees.

In the calculator, you set an expected annual return and an annual fee. We combine them into a single “net return” estimate:

Because most 401(k) contributions happen throughout the year, the calculator applies returns at your chosen contribution frequency (monthly, biweekly, etc.). That means the model behaves more realistically than a once-per-year deposit assumption.

Employer match: “X% match up to Y%” explained

Many plans advertise matching like this: “50% match up to 6%”. Translation: if you contribute up to 6% of your salary, your employer will add 50% of that contribution amount. If you contribute more than 6%, the employer usually doesn’t match the extra amount.

This calculator models that directly:

• Your contribution each paycheck = salary × contribution% ÷ pay periods.
• Matchable portion is capped at salary × match up to%.
• Employer deposit = match rate × matchable portion.

The practical takeaway is simple: if your plan matches, try hard to contribute at least enough to capture the full match. Otherwise you’re leaving part of your compensation on the table.

Raises matter: contributions grow when salary grows

A common mistake is to assume your contribution stays flat forever. If you contribute a percentage of salary, and salary increases over time, then contributions increase too — which can significantly increase your final balance.

The calculator applies your annual salary growth at the end of each year and uses the updated salary to compute the next year’s contributions. If you want to approximate step-ups (like raising your contribution by 1% each year), you can run a few scenarios: one at today’s contribution %, and one at the higher % you plan to reach.

Inflation: future dollars vs today’s dollars

A projected balance 25 years from now might look huge — but future dollars won’t buy what today’s dollars buy. That’s why this calculator also shows an estimate in today’s dollars:

This doesn’t change your actual future balance; it changes the interpretation. If you see $1,000,000 in the future, and inflation averages 2.5% over 25 years, the “today’s dollars” equivalent is much lower — still powerful, but more grounded.

Worked examples

Example 1: The “get the match” baseline

Suppose you have $25,000 already saved, earn $85,000, contribute 6% to get the full match, and your employer matches 50% up to 6%. That means your employer is effectively adding about 3% of salary. If you invest for 25 years at 7% with 0.5% fees, you’ll likely see that growth eventually becomes the biggest component of your balance.

Example 2: Add 1% contribution — the “small lever, big result” test

Now change your contribution from 10% to 11% (or from 6% to 7%). That’s a small change in take-home pay, but over decades it can create a meaningful difference because every extra dollar you contribute also compounds.

Example 3: Fees are sneaky

Compare 0.20% fees vs 1.00% fees. The difference sounds tiny, but over 30 years it can become a large chunk of your ending balance. That’s why low-cost index funds and fee-aware plan choices can matter so much.

FAQs

Is this an exact prediction?

No. Real markets are volatile. This tool uses an average return to help with planning and scenario testing. A “good” plan is one that still works under conservative assumptions — try a lower return (like 5%) to stress test.

What return should I use?

Many people use 6–8% as a long-run stock-heavy portfolio estimate, but your mix of stocks/bonds matters. If you’re unsure, run three scenarios: conservative (5%), moderate (7%), aggressive (9%).

Should I use nominal or real return?

In this calculator, return is nominal (not inflation-adjusted). That’s why we separately show “today’s dollars.” If you prefer thinking in real terms, you can set inflation to 0 and instead reduce your return by your inflation estimate.

Do 401(k) contribution limits matter?

Yes in real life: the IRS sets annual limits for employee contributions (and separate overall limits for total contributions). This calculator does not enforce those limits because they change over time and depend on your age and plan features. For high earners, interpret results as an estimate and adjust if you expect to hit the limit.

Does employer match always vest immediately?

Not always. Some employers use a vesting schedule (you earn ownership over time). This calculator assumes matched dollars are yours. If you have a vesting schedule, treat the employer match result as the maximum possible benefit.

What about taxes and withdrawals?

Traditional 401(k) balances are generally taxed as ordinary income when withdrawn. Roth 401(k) withdrawals can be tax-free if qualified. Because taxes depend on your future situation, this calculator focuses on account growth, not after-tax retirement income.

How can I use this calculator to improve my plan?

• First, set a realistic return (and include fees).
• Make sure you’re capturing the full employer match (if available).
• Increase your contribution rate gradually (even +1% per year is powerful).
• Re-run scenarios when your salary changes.

Want a quick challenge? Run your current plan, then re-run with a 1% higher contribution and 0.3% lower fees. If the difference surprises you, that’s the point — tiny tweaks can compound into life-changing outcomes.