401k Calculator 2025: Employer Match & Growth Projection
Use our free 401k calculator to project your retirement savings growth with employer matching contributions. This 401k calculator with employer match shows exactly how your contributions, company match, and investment returns combine to build your retirement nest egg.
For 2025, the IRS allows employee contributions up to $23,500, with an additional $7,500 catch-up contribution for those age 50 and older (total $31,000). Our 401k growth calculator factors in these limits, your employer's matching formula, expected investment returns, and salary growth.
Compare Traditional vs Roth 401k options, see year-by-year projections, and understand how much you'll have at retirement. Scroll down for 2025 contribution limits, vesting schedules explained, and real-world examples of 401k growth.
2025 401k Limits: $23,500 (under 50) | $31,000 (50 and older with catch-up)
Your 401k Details
$8,000/year
Employer Match
e.g., 50% = employer matches 50 cents per dollar
Common: 3%-6% of salary
Growth Assumptions
Projection Results
Enter your details to calculate 401k growth
2025 401k Contribution Limits
| Limit Type | 2025 Amount | Notes |
|---|---|---|
| Employee Contribution (Under 50) | $23,500 | Traditional and/or Roth combined |
| Catch-Up Contribution (50+) | $7,500 | Additional amount for age 50 and older |
| Total Employee (50+) | $31,000 | $23,500 + $7,500 catch-up |
| Total (Employee + Employer) | $70,000 | Maximum combined contributions |
| Compensation Limit | $350,000 | Max salary considered for contributions |
What Is a 401(k)?
A 401(k) is a tax-advantaged retirement savings plan sponsored by employers in the United States. Named after subsection 401(k) of the Internal Revenue Code, it allows employees to save and invest a portion of their paycheck before taxes are deducted (Traditional 401k) or after taxes (Roth 401k).
One of the most powerful features of a 401(k) is the employer match — essentially free money your employer contributes based on your own contributions. A common match formula is "50% of contributions up to 6% of salary," meaning if you contribute 6% of your $80,000 salary ($4,800), your employer adds $2,400.
Investments in a Traditional 401(k) grow tax-deferred, meaning you don't pay taxes on contributions or growth until you withdraw in retirement. Roth 401(k) contributions are made with after-tax dollars, but qualified withdrawals (including growth) are completely tax-free.
Early withdrawals before age 59½ typically incur a 10% penalty plus income taxes. However, the SECURE 2.0 Act introduced new exceptions for emergencies and other situations.
Traditional vs. Roth 401(k)
| Feature | Traditional 401(k) | Roth 401(k) |
|---|---|---|
| Contributions | Pre-tax (reduces taxable income now) | After-tax (no immediate tax benefit) |
| Growth | Tax-deferred | Tax-free |
| Withdrawals in Retirement | Taxed as ordinary income | Tax-free (if qualified) |
| RMDs | Required starting at 73 | Not required (SECURE 2.0) |
| Best For | Higher earners, expect lower tax bracket in retirement | Young earners, expect higher tax bracket in retirement |
Pro tip: Many experts recommend contributing to both types for tax diversification. Your employer match always goes into the Traditional portion, regardless of your election.
Understanding Employer Match
Employer matching is one of the best benefits in a 401(k) plan — it's essentially free money for your retirement. Common match formulas include:
Dollar-for-Dollar Match
100% match up to 3-6% of salary. Contribute 6%, get 6% from employer.
50 Cents on the Dollar
50% match up to 6% of salary. Contribute 6%, get 3% from employer.
Tiered Match
100% on first 3%, then 50% on next 2%. Varies by employer.
Always contribute at least enough to get the full match! If your employer matches 50% up to 6%, and you only contribute 3%, you're leaving money on the table.
Vesting Schedules Explained
Vesting determines how much of your employer's contributions you get to keep if you leave the company. Your own contributions are always 100% vested immediately. Common vesting schedules include:
Cliff Vesting
0% vested until a specific date, then 100% vested.
- • Year 1: 0%
- • Year 2: 0%
- • Year 3: 100%
Graded Vesting
Vesting increases gradually each year.
- • Year 1: 0%
- • Year 2: 20%
- • Year 3: 40%
- • Year 4: 60%
- • Year 5: 80%
- • Year 6: 100%
Check your plan documents or HR department to understand your vesting schedule. If you're considering leaving your job, know how much of the employer match you'll keep.
Real-World Example: Meet David
David is 30 years old, earns $80,000/year, and wants to retire at 65. His employer offers a 50% match up to 6% of salary. He currently has $25,000 in his 401k.
David's Contribution Strategy
- • Contributes 10% of salary = $8,000/year
- • Employer matches 50% of first 6% = $2,400/year
- • Total annual contribution: $10,400
35-Year Projection (7% return, 3% salary growth)
- • At age 40: ~$185,000
- • At age 50: ~$480,000
- • At age 60: ~$1,080,000
- • At age 65: ~$1,580,000
Retirement Income (4% Rule)
$1,580,000 × 4% = $63,200/year or $5,267/month
Key Takeaways
- • David's $280,000 in contributions became $1.58 million
- • $84,000 was "free money" from employer match
- • ~$1.2 million came from investment growth
- • Starting at 30 gives compound interest 35 years to work
401(k) vs. IRA: Which Is Better?
| Feature | 401(k) | IRA |
|---|---|---|
| 2025 Contribution Limit | $23,500 ($31,000 if 50+) | $7,000 ($8,000 if 50+) |
| Employer Match | Yes - free money! | No |
| Investment Options | Limited to plan offerings | Nearly unlimited |
| Fees | Varies by plan (can be high) | You choose (can be very low) |
| Income Limits (Roth) | No limit | $161,000 Single / $240,000 MFJ |
Recommended strategy: First, contribute enough to your 401(k) to get the full employer match. Then, max out a Roth IRA ($7,000). Finally, return to max out your 401(k) if you have more to save.
Disclaimer
This 401k calculator provides estimates for educational purposes only. Actual results will vary based on investment performance, fees, contribution timing, and other factors. Past performance does not guarantee future results. Consult a qualified financial advisor for personalized retirement planning advice.