Estimate your 401k balance at retirement based on your contributions, employer match, and expected investment returns. See why maxing your employer match is the single best financial move you can make.
Contribution limits, employer match averages, and growth projections
Enter your current balance, monthly contribution, employer match, and years until retirement to project your 401k value.
Open Retirement Calculator →Both account types follow the same contribution limits and employer match rules. The difference is entirely about when you pay taxes.
Contributions are made with pre-tax dollars. If you earn $75,000 and contribute $10,000, your taxable income drops to $65,000. You pay taxes only when you withdraw money in retirement. This makes sense if you expect to be in a lower tax bracket in retirement than you are today — your tax savings now are larger than your future tax bill.
Contributions are made with after-tax dollars — no upfront tax break. But all qualified withdrawals in retirement (including all the growth) are completely tax-free. This is most powerful for young workers early in their careers, people expecting higher future income, or anyone who believes tax rates will rise over time. The Roth's tax-free growth is especially valuable over 30+ year horizons.
Employer matching is the closest thing to free money in personal finance. If your employer matches 100% of contributions up to 4% of salary, and you earn $60,000, not contributing 4% ($2,400) means leaving $2,400 of your compensation on the table — a 100% instant return before any investment growth occurs.
The average employer match is approximately 4.3% of salary. Over a 30-year career, an uncaptured $2,400 annual match growing at 7% represents over $227,000 in lost retirement savings. Always, without exception, contribute at least enough to capture the full employer match before directing money anywhere else.
The IRS sets annual limits on 401k contributions. In 2024, employees can contribute up to $23,000 in elective deferrals. Workers aged 50 and older can add a catch-up contribution of $7,500, for a total of $30,500. Employer contributions (matching and profit-sharing) bring the combined limit to $69,000 ($76,500 with catch-up). These limits are indexed to inflation and typically increase by $500 increments each year.
To max out a 401k at $23,000 on a $75,000 salary, you would need to defer about 30.7% of your income. Most people cannot do this immediately — a gradual increase strategy of raising contributions by 1–2% per year (especially after raises) is a sustainable path to maximizing contributions over time.
Most 401k plans offer a menu of mutual funds and sometimes company stock. The best default strategy for most investors is a target-date fund aligned with your expected retirement year (e.g., Target Date 2055). These funds automatically shift from aggressive (heavy stocks) to conservative (more bonds) as you approach retirement. Alternatively, a simple three-fund portfolio — U.S. total market index fund, international index fund, and bond index fund — gives excellent diversification at minimal cost. Always look at expense ratios: prefer funds under 0.20% per year.
The optimal order for most workers: (1) Contribute to 401k up to the full employer match. (2) Max out a Roth IRA ($7,000 in 2024) for better investment options and flexibility. (3) Return to the 401k and contribute up to the $23,000 limit. (4) Use taxable brokerage for additional investing. This sequence captures free money first, then maximizes tax advantages across multiple account types.
Employees can contribute up to $23,000 in 2024. Workers 50+ can add a $7,500 catch-up contribution, totaling $30,500. Combined employee + employer contributions cap at $69,000 ($76,500 with catch-up). Limits typically increase $500/year with inflation.
Traditional: pre-tax contributions reduce income now; taxed at withdrawal. Roth: after-tax contributions; all withdrawals in retirement are tax-free including growth. Choose Traditional if you expect lower retirement tax bracket; choose Roth if early in career or expecting higher future taxes.
Employer matches your contributions up to a percentage of salary. Common formula: 100% match up to 4% of salary. On a $60K salary, that's $2,400 in free money per year. Average employer match is 4.3% of salary. Always contribute at least enough to get the full match.
Prioritize order: (1) 401k to full employer match, (2) Roth IRA to $7,000 limit, (3) Back to 401k up to $23,000, (4) Taxable brokerage. If your 401k has excellent low-cost funds, you may max it before the IRA. Never skip the employer match.