401k Calculator 2026

A 401(k) is a tax-advantaged retirement account offered through your employer. You contribute a portion of each paycheck pre-tax (Traditional) or after-tax (Roth), and the money grows tax-deferred or tax-free until retirement. Most employers match a portion of your contributions — that match is, dollar-for-dollar, the highest-return investment most workers will ever make.

This calculator projects your balance at retirement using compound growth on three streams: your contributions, your employer's match, and investment returns. The math is straightforward — each year your contributions go in, the balance earns the assumed annual return, and the cycle repeats. Over 30+ years, growth from compounding typically ends up being the largest single component of your final balance.

The headline at the top of the calculator shows two numbers side by side: the nominal projected balance at retirement (in future dollars), and that same balance translated to today's purchasing power (assuming 3%/year inflation, the long-run US average). The gap between the two is large enough to matter. A $2M projection in 2061 dollars is roughly $700K in 2026 dollars over a 35-year horizon — still very meaningful, just not the same as $2M today. We surface both because retirement planning hinges on real purchasing power, not the headline number.

Most employers now offer both Traditional and Roth 401(k) options — sometimes both within the same plan. The mechanical difference: Traditional contributions reduce your taxable income now and are taxed as ordinary income on withdrawal; Roth contributions are made with after-tax dollars and qualified withdrawals (after age 59½ and 5+ years in the account) are tax-free.

The decision boils down to your expected tax rate today versus in retirement. If you're in your peak earning years and expect lower retirement income (and therefore a lower bracket), Traditional usually wins. If you're early-career, low-earning, or expect taxes to rise broadly, Roth usually wins. Many advisors suggest splitting contributions for tax diversification — about 50/50 if you're unsure, more weighted to Traditional if you're a high earner today.

One important caveat: employer matching dollars are always pre-tax, even if you elect Roth for your own contributions. Those matched dollars sit in a parallel Traditional 401(k) sub-account and will be taxable on withdrawal. This calculator assumes Traditional treatment for projection purposes — the dollar amounts are the same; only the tax treatment at withdrawal differs.

Most US employers offer some form of 401(k) match. The most common structures: "100% of the first 3–4% you contribute" (full dollar-for-dollar match up to a cap), or "50% of the first 6%" (partial match). A small number of generous employers go higher — Microsoft and Google match 50% of $24,500 = $11,750/year; some federal contractors and unionized workers see 8–10% straight contributions regardless of what the employee puts in.

The math on the match is unambiguous. If you're earning $80,000 with a 100%-match-up-to-4% formula, contributing 4% gets you $3,200 of free money each year. If you only contribute 3%, you get $2,400. If you contribute 0%, you get nothing — and you're effectively taking a 4% pay cut compared to coworkers who max the match. Always contribute at least up to the match cap before doing anything else with savings.

A few wrinkles worth knowing: vesting schedules mean you may forfeit some employer dollars if you leave before a certain tenure (3-year cliff vesting and 6-year graded are most common). True-up matching is whether the employer fixes mid-year over-front-loading at year-end (some plans do, some don't). Check your Summary Plan Description for both — the difference between vested and unvested matched dollars can be five figures over a career.

The 4% rule comes from the Trinity Study (1998) — researchers analyzed historical market returns and found that retirees who withdrew 4% of their initial portfolio in year one and adjusted for inflation each subsequent year had a high probability of their savings lasting at least 30 years. So a $1M portfolio supports roughly $40,000/year of inflation-adjusted spending; a $2M portfolio supports $80,000/year.

More recent research (Morningstar 2023, Bengen updates) has suggested 4% may be slightly aggressive in today's lower-yield environment — many planners now use 3.3–3.7% as a more conservative starting point. Sequence-of-returns risk (a bad market in your first 3–5 retirement years) is the biggest threat to portfolio longevity. The fix isn't to save dramatically more; it's to have flexibility — 1–2 years of cash buffer to avoid selling at market lows, willingness to reduce spending temporarily, or working part-time if needed.

The estimate at the top of the calculator uses 4% as a planning anchor. If you want to be more conservative, multiply your projected balance by 0.033 instead of 0.04. The headline number doesn't change the math — what matters is that you've got enough by the time you retire. For most middle-class earners, that means contributing consistently from your 20s through your 60s and capturing the full employer match every single year.