Retirement & 401(k) Calculator

Enter your age, your retirement age, what you have saved, what you put in each month, your employer match and an assumed annual return, and the Retirement Calculator projects your balance at retirement. With its default inputs, age 30 to 65, $20,000 already saved, $500 a month from you, a $250 monthly match and a 7% assumed return, the projection is $1,580,914. Of that, $335,000 is money that went in and $1,245,914 is investment growth.

That figure is arithmetic, not a forecast. Every number in it depends on the return you assume, and nobody knows what markets will return over the next 35 years. What the arithmetic does show reliably is how the pieces interact: how much a match adds, how much a late start costs, and how sensitive the answer is to the return. This guide works through each of those, then covers the other side of retirement: how much you need, how a balance turns into an annuity payout, how Traditional and Roth accounts are taxed, and how claiming age changes a Social Security benefit.

The three engines of retirement growth

1. Your contributions, the money you put in each month.
2. Employer match, money your employer adds on top, usually tied to how much you contribute.
3. Compounding returns, growth on your balance that itself grows, year after year.

The calculator combines all three. The first two are within your control or your employer's. The third is the one that does most of the work over long periods, and the one you can least predict.

How does a 401(k) projection work?

A 401(k) projection is two future value calculations added together: the future value of the balance you already have, and the future value of a series of equal monthly deposits. Both compound at the same rate.

The calculator converts your annual return to a monthly rate by dividing by 12, counts the months between your current age and your retirement age, and treats your contribution plus the match as one deposit made at the end of each month.

The future value formula for monthly contributions

projected balance = starting balance × (1 + r)^n + monthly deposit × ((1 + r)^n − 1) ÷ r

Where:

• r is the annual return ÷ 12
• n is the number of years × 12
• monthly deposit is your contribution plus the employer match

If you enter a 0% return the formula would divide by zero, so the calculator simply adds everything up: starting balance plus monthly deposit × n.

Worked example: $500 a month from age 30 to 65 at 7%

Take the deposits on their own first, with no starting balance and no match.

• r = 0.07 ÷ 12 = 0.0058333
• n = 35 × 12 = 420 months
• (1 + r)^420 = 11.5062
• (11.5062 − 1) ÷ 0.0058333 = 1,801.05
• $500 × 1,801.05 = $900,527

You deposited $500 × 420 = $210,000. The other $690,527 is growth. The number worth remembering is 1,801.05: at a 7% assumed return, every dollar deposited monthly for 35 years becomes $1,801.05, against the $420 you actually put in.

Adding a starting balance and the employer match

The starting balance compounds on its own: $20,000 × 11.5062 = $230,123.

The $250 match uses the same factor as your own deposits: $250 × 1,801.05 = $450,264.

Add the three parts: $900,527 + $230,123 + $450,264 = $1,580,914, which is exactly what the calculator shows with its defaults.

The calculator's "Total contributions" line is the starting balance plus every deposit, yours and your employer's: $20,000 + ($750 × 420) = $335,000. "Investment growth" is the projected balance minus that figure.

How does an employer 401(k) match change the result?

To the calculator, a match is simply more money deposited each month, so it grows by exactly the same factor as your own contributions. The calculator asks for the match as a monthly dollar amount, which means you have to turn your plan's formula into dollars first.

Match formulas vary a great deal between employers. They differ in the percentage matched, the cap, how often the money is deposited and how long you must stay before it is fully yours. The formulas below are illustrations only, not a typical or recommended plan. Read your own plan documents for yours.

An illustrative match formula: 50% of the first 6% of salary

Under this example formula, the employer adds 50 cents for every dollar you contribute, on contributions up to 6% of salary. On a hypothetical $60,000 salary, 6% is $3,600 a year, or $300 a month, so the most the employer adds is $150 a month.

Balances below run from age 30 to 65 at a 7% assumed return with no starting balance.

You contribute	Your deposit per month	Match per month	Balance at 65
3% of salary	$150	$75	$405,237
6% of salary	$300	$150	$810,475
8% of salary	$400	$150	$990,580
6% of salary, no match	$300	$0	$540,316

Three things stand out.

• Going from 3% to 6% doubles both your deposit and the match, and doubles the balance.
• At 6%, the $150 match alone accounts for $150 × 1,801.05 = $270,158 of the $810,475.
• Going from 6% to 8% adds $180,105, but all of it comes from your own extra $100 a month, because the match is already at its cap.

Formulas that look different can land close together. A different illustrative plan matching dollar for dollar on the first 4% of salary gives $200 from you and $200 from the employer, which projects to $720,422 on the same assumptions.

Why capturing the full match comes first

Under the illustrative 50% formula, every dollar you contribute up to the cap brings 50 cents from your employer the moment it lands, an immediate 50% on those dollars before any market growth. Under a dollar-for-dollar formula it is 100%. No ordinary investment reliably does that, which is why contributing at least enough to get the full match is usually the first priority, provided you stay long enough for the match to vest.

Vesting: when the match becomes yours

The money you contribute from your own pay is always yours. Employer contributions can be subject to a vesting schedule, and if you leave before you are fully vested you can forfeit the unvested part. Federal rules limit how long a vesting schedule can run, and your plan's summary plan description states your plan's actual schedule. If there is a real chance you will leave before vesting, enter only the match you expect to keep.

401(k) balance at 65 by starting age and monthly contribution

The table shows what the calculator's formula produces for different starting ages and monthly deposits, where the deposit is your contribution and any match combined.

Assumptions, not a forecast: a 7% annual return (the calculator's default), compounded monthly, no starting balance, deposits at the end of each month, no fees, no taxes and no increases in the deposit over time. Actual returns will differ, sometimes by a lot.

Starting age	Years to 65	$250 a month	$500 a month	$750 a month	$1,000 a month	$1,500 a month
25	40	$656,203	$1,312,407	$1,968,610	$2,624,813	$3,937,220
30	35	$450,264	$900,527	$1,350,791	$1,801,055	$2,701,582
35	30	$304,993	$609,986	$914,978	$1,219,971	$1,829,956
40	25	$202,518	$405,036	$607,554	$810,072	$1,215,108
45	20	$130,232	$260,463	$390,695	$520,927	$781,390
50	15	$79,241	$158,481	$237,722	$316,962	$475,443
55	10	$43,271	$86,542	$129,814	$173,085	$259,627

To see how much of each figure is your own money, multiply the monthly deposit by the months. At $500 a month that is $240,000 from age 25, $210,000 from 30, $180,000 from 35, $150,000 from 40, $120,000 from 45, $90,000 from 50 and $60,000 from 55.

Why starting early wins

Read down the $500 column. Starting at 25 instead of 35 costs an extra $60,000 in deposits and, on these assumptions, produces $702,421 more at 65. The ten extra years are the last ten years of compounding on everything, which is where the balance grows fastest.

Now read across. To reach the same $1,312,407 that $500 a month from 25 produces, someone starting at 35 needs about $1,075.77 a month, and someone starting at 45 needs about $2,519.37 a month. Time and money substitute for each other, but not evenly: at a 7% assumed return, each decade of delay a little more than doubles the monthly amount required.

How much does the assumed return change a 401(k) projection?

More than any other input. The table holds everything else fixed at $500 a month from 30 to 65, with no starting balance.

Assumed annual return	Balance at 65	You deposited	Growth
0%	$210,000	$210,000	$0
4%	$456,865	$210,000	$246,865
5%	$568,046	$210,000	$358,046
6%	$712,355	$210,000	$502,355
7%	$900,527	$210,000	$690,527
8%	$1,146,941	$210,000	$936,941

Moving the assumption by a single percentage point changes the 35-year result by somewhere between a fifth and a quarter or more. From 6% to 7% adds $188,172, about 26% more. From 7% to 8% adds $246,414, about 27% more.

The help text on the calculator's return field describes 7% as roughly what a diversified portfolio has historically averaged after inflation. That is a description of the past, not a promise about the future, and a portfolio that holds more bonds or cash has historically earned less than one that holds mostly stocks. Run the calculator at two or three different returns and plan around a range, not the single most flattering number.

What a 1% annual fee costs over 35 years

A fund or plan that charges 1% a year takes roughly one percentage point off your return, every year, on the whole balance. In the table, that is the gap between the 7% row and the 6% row: $188,172 less on $500 a month over 35 years, about 21% of the balance.

The calculator has no separate fee field. To account for costs, subtract your total annual costs, fund expense ratios plus any plan administration fees, from the return you enter.

How much do I need to save a month to have $1 million at 65?

Rearrange the future value formula to solve for the deposit:

monthly deposit = target ÷ (((1 + r)^n − 1) ÷ r)

At 7% from age 30, the factor is 1,801.05, so $1,000,000 ÷ 1,801.05 = $555.23 a month.

The table assumes no starting balance and counts your contribution and any match together. Both return columns are assumptions.

Starting age	Months to 65	Monthly deposit at an assumed 5%	Monthly deposit at an assumed 7%
25	480	$655.30	$380.98
30	420	$880.21	$555.23
35	360	$1,201.55	$819.69
40	300	$1,679.23	$1,234.46
45	240	$2,432.89	$1,919.66
50	180	$3,741.27	$3,154.95
55	120	$6,439.88	$5,777.51

The Retirement Calculator projects forward rather than solving for the deposit, so to check a row, enter the starting age, 65, a $0 balance, the deposit from the table and the return, and the projection comes back at $1,000,000 to within a few dollars of rounding. If you already have savings, enter them and lower the monthly figure until the projection lands on your target.

Keep in mind that $1 million decades from now will not buy what $1 million buys today. The inflation section below shows how to adjust for that.

How much do I need to retire?

The honest answer depends on one figure: how much you will need to spend each year from savings, after any Social Security, pension or other income. Once you have that number, a common planning shortcut turns it into a savings target.

The 4% rule and where it came from

The 4% rule comes from a 1994 article by financial planner William Bengen in the Journal of Financial Planning. He tested withdrawal strategies against US historical returns for a portfolio of stocks and intermediate-term government bonds, over 30-year retirements. He found that withdrawing 4% of the starting balance in the first year, then raising that dollar amount by inflation every year regardless of markets, lasted at least 30 years in every historical starting year he examined. A 1998 study by three Trinity University professors, often called the Trinity study, reached broadly similar conclusions and helped make the idea widely known.

The mechanism, on a $1,000,000 balance:

• Year one withdrawal: $1,000,000 × 4% = $40,000, or $3,333.33 a month
• Year two: $40,000 raised by that year's inflation, whatever the portfolio did
• And so on, with the withdrawal tied to prices rather than to the balance

Turned around, the rule gives a target: savings needed = annual spending from savings ÷ 0.04, which is the same as 25 times that spending.

Retirement savings target by annual spending

Annual spending from savings	Target at 4% (25×)	Target at 3.5%	Target at 3%
$30,000	$750,000	$857,143	$1,000,000
$40,000	$1,000,000	$1,142,857	$1,333,333
$50,000	$1,250,000	$1,428,571	$1,666,667
$60,000	$1,500,000	$1,714,286	$2,000,000
$80,000	$2,000,000	$2,285,714	$2,666,667

Two adjustments matter before you use the table. Subtract the income you expect from Social Security and any pension first, since only the remainder has to come from savings. And if the money will sit in a Traditional account, withdrawals are taxed, so your spending figure needs to include the tax you will owe on them.

Known criticisms of the 4% rule

It is a planning guideline built on a specific historical test, and it has real limits.

• It is based on US history. The US market was one of the strongest performers of the last century. Research applying the same test to other countries' historical returns found lower sustainable withdrawal rates in many of them.
• It assumes a 30-year retirement. Someone retiring at 50 may need their money to last 40 years or more, which generally calls for a lower starting rate.
• Sequence of returns risk. Poor returns in the first few years of withdrawals do far more damage than the same poor returns later, because you are selling investments while they are down. Two retirees with the same average return can end up in very different places.
• Spending is treated as fixed. Real retirees tend to spend less after bad years and adjust as they age. Flexible withdrawal approaches that cut back after poor markets can support a higher starting rate, or a safer one.
• Fees and taxes. The rule is usually quoted without allowing for advisory fees or the tax on withdrawals. A 1% annual cost is a quarter of a 4% withdrawal, and tax on Traditional account withdrawals comes out of the same money.
• It can be too cautious. The rule was built around the worst historical periods. In many other periods a retiree following it would have finished with more than they started, which means following it rigidly can mean spending less than you could have.

Treat 4% as a starting point for a conversation about your own numbers, not as a guarantee in either direction.

What is an annuity payout?

An annuity, in the mathematical sense, is a series of equal payments made at regular intervals. An annuity payout is the level payment a lump sum can support for a fixed number of periods at a given interest rate, until the balance reaches exactly zero.

It is mortgage math run in reverse. With a mortgage the lender hands you a lump sum and you repay it in equal instalments with interest. With an annuity payout, your balance is the lump sum, and it pays you back in equal instalments while the part not yet paid out keeps earning.

Annuity payout formula, worked on $1,000,000

monthly payout = balance × r ÷ (1 − (1 + r)^−n)

Take a $1,000,000 balance paid out monthly over 25 years, at an assumed 4% annual return during the payout years:

• r = 0.04 ÷ 12 = 0.0033333
• n = 25 × 12 = 300 months
• (1 + r)^−300 = 0.36849
• 1 − 0.36849 = 0.63151
• $1,000,000 × 0.0033333 ÷ 0.63151 = $5,278.37 a month

Over 300 months that is $1,583,511 paid out in total. The $583,511 above the starting balance is growth earned on the money still waiting to be paid. At a 0% return, the same balance would pay $1,000,000 ÷ 300 = $3,333.33 a month.

Annuity payout table for $500,000 and $1,000,000

Balance	Years of payouts	Monthly payout at 0%	Monthly payout at an assumed 4%
$500,000	20	$2,083.33	$3,029.90
$500,000	25	$1,666.67	$2,639.18
$500,000	30	$1,388.89	$2,387.08
$1,000,000	20	$4,166.67	$6,059.80
$1,000,000	25	$3,333.33	$5,278.37
$1,000,000	30	$2,777.78	$4,774.15

Compare this with the 4% rule. On $1,000,000, the 4% rule starts at $3,333.33 a month, rises with inflation and aims to leave money over after 30 years. A 25-year payout at an assumed 4% starts much higher at $5,278.37, but the payment is flat in dollars, so it buys less each year, and the balance hits zero at the end of the period. If you live past the payout period, the income stops.

Buying an annuity versus drawing down your own balance

The formula above describes spending down your own balance. An income annuity bought from an insurance company is a different product. You hand over a lump sum and the insurer promises payments, often for as long as you live.

The insurer sets the payment using interest rates at the time you buy, your age, its estimate of how long people like you live, the options you choose (such as payments continuing to a surviving spouse, or payments that rise each year) and its own costs. Because the insurer pools many buyers, those who live shorter lives effectively fund those who live longer, which is how a lifetime annuity can pay more than you could safely withdraw on your own. The trade-off is that you usually give up access to the lump sum, and unless you buy a guarantee, little or nothing may be left for heirs.

The Retirement Calculator does not price commercial annuities, and the payout formula above does not include that pooling. If you are considering one, get written quotes from more than one provider and compare them against the drawdown math.

Future value of an annuity: the formula behind the calculator

A future value annuity calculation asks the opposite question to a payout: how much does a series of equal deposits grow to?

future value of an annuity = payment × ((1 + r)^n − 1) ÷ r

That is the second half of the retirement projection formula. Set the starting balance to zero and the Retirement Calculator is a future value of an annuity calculator: $500 a month for 420 months at 7% gives $900,527, the same result as the worked example above.

Ordinary annuity versus annuity due

The formula assumes each deposit arrives at the end of the period, which is called an ordinary annuity, and it is what the calculator uses. If deposits arrive at the start of each period, an annuity due, every deposit gets one extra month of growth, so you multiply the result by (1 + r).

On $500 a month for 35 years at 7%: ordinary annuity $900,527, annuity due $900,527 × 1.0058333 = $905,780, a difference of $5,253. Payroll contributions land whenever you are paid, so neither version is exactly right, and the gap is tiny next to the uncertainty in the return itself.

Investment and annuity calculators: which formula answers which question

Most investment and annuity calculators run on the same handful of formulas. Knowing which one you need saves a lot of confusion.

Your question	Formula	TallyCrunch calculator
What will my savings grow to by a certain age?	Future value of a balance plus an annuity	Retirement Calculator
What will a lump sum and monthly deposits grow to over a set number of years?	Future value of a balance plus an annuity	Compound Interest Calculator
What return did an investment actually earn?	Total return and annualized return	Investment ROI Calculator
How long until I reach a target?	Future value, solved for time	Savings Goal Calculator
What monthly income can a balance pay?	Present value of an annuity, solved for payment	Worked by hand above

The Investment ROI Calculator is the useful check on the return you assume. Enter what an account was worth years ago and what it is worth now, and its annualized return shows what you have actually earned. Bear in mind that if you were adding money along the way, that figure counts your deposits as gains, so it will overstate the true return.

Traditional vs Roth 401(k): how the tax treatment differs

Both are ways of holding the same investments. The difference is when the tax is paid.

• Traditional: contributions come out of your pay before income tax, the account grows without annual tax, and withdrawals in retirement are taxed as ordinary income.
• Roth: contributions come out of pay after income tax, the account grows without annual tax, and qualified withdrawals of both contributions and earnings are tax-free.

Employer match contributions have traditionally gone into the pre-tax side of a plan. Whether your plan offers a Roth option for employer money depends on the plan.

The Retirement Calculator does not apply any tax. A projected Traditional balance is a pre-tax figure, and part of it belongs to the tax authorities. A projected Roth balance is already after tax. Comparing the two numbers directly overstates the Traditional account.

Traditional vs Roth worked through with hypothetical tax rates

Start with $10,000 of pay, and suppose the investment grows fourfold by retirement. The tax rates below are hypothetical round numbers chosen to show the mechanism, not current tax brackets.

Step	Traditional	Roth
Pay set aside	$10,000	$10,000
Tax now at 25%	$0	$2,500
Amount invested	$10,000	$7,500
Value after growing fourfold	$40,000	$30,000
Tax at withdrawal at 25%	$10,000	$0
Spendable in retirement	$30,000	$30,000

At the same tax rate now and later, the two come out identical. The order of multiplication does not matter. What changes the answer is the difference between your tax rate today and your tax rate when you withdraw.

• If the rate at withdrawal is 15%, the Traditional account leaves $40,000 × 0.85 = $34,000, beating the Roth's $30,000.
• If the rate at withdrawal is 35%, the Traditional account leaves $40,000 × 0.65 = $26,000, and the Roth wins.

That is the whole decision in its simplest form: pay tax now at today's rate, or later at a rate you have to guess. To see what a Traditional contribution does to your paycheck today, enter it as a pre-tax deduction in the Take-Home Pay Calculator.

A few statutory rules sit around this. Roth withdrawals are generally only fully tax-free once you are 59½ and the account has been open at least five years. Withdrawing earnings from either type before 59½ generally triggers ordinary income tax plus a 10% additional tax, with a number of exceptions. Direct contributions to a Roth IRA are limited by income, and those income limits change. Confirm the rules that apply to you with the IRS.

Required minimum distribution ages

Traditional accounts cannot grow untaxed forever. Under the SECURE 2.0 Act, required minimum distributions from Traditional 401(k)s and IRAs generally begin at age 73 for people born from 1951 through 1959, and at age 75 for people born in 1960 or later. Roth IRAs have no required minimum distributions during the original owner's lifetime, and since 2024 designated Roth accounts in a 401(k) no longer require them either.

These ages have changed several times in recent years, and exceptions apply, for example to some people still working for the employer that sponsors the plan. Confirm your own age and rules with the IRS before relying on them.

How does claiming age change Social Security benefits?

The Retirement Calculator does not calculate Social Security. But because Social Security reduces how much your savings have to cover, the claiming decision belongs in any retirement plan.

The mechanism works like this. Your retirement benefit is based on your highest 35 years of earnings, adjusted for wage growth, which produces the benefit you would receive at your full retirement age. Claim before that age and the benefit is permanently reduced for each month early. Claim after it and the benefit is permanently increased by delayed retirement credits for each month late, up to age 70. The earliest age you can claim a retirement benefit is 62.

Under current law, full retirement age is 67 for people born in 1960 or later, and between 66 and 67 for people born from 1943 through 1959. The statutory reduction is 5/9 of 1% for each of the first 36 months you claim early and 5/12 of 1% for each month beyond that. Delayed retirement credits for anyone born in 1943 or later are 2/3 of 1% a month, which is 8% a year, and they stop at 70. These are statutory rules that Congress can change, so confirm them with the Social Security Administration, and use your own Social Security statement for your actual benefit estimate.

Social Security benefit by claiming age with a full retirement age of 67

Shown as a percentage of the full benefit, so it applies whatever your own benefit amount is.

Claiming age	Months from 67	Percentage of full benefit	How it is calculated
62	60 early	70%	36 × 5/9% = 20%, plus 24 × 5/12% = 10%
63	48 early	75%	20% plus 12 × 5/12% = 5%
64	36 early	80%	36 × 5/9% = 20%
65	24 early	86.67%	24 × 5/9% = 13.33%
66	12 early	93.33%	12 × 5/9% = 6.67%
67	0	100%	Full retirement age
68	12 late	108%	12 × 2/3% = 8%
69	24 late	116%	24 × 2/3% = 16%
70	36 late	124%	36 × 2/3% = 24%

Spousal benefits follow different reduction rules, and there is no increase for waiting past 70.

Social Security break-even age

Claiming early means more payments at a lower amount. Claiming late means fewer payments at a higher amount. The break-even age is when the late claimer's total catches up. You can work it out in months of full benefit, without needing any dollar amount.

• 62 versus 67. By 67, the early claimer has received 60 months × 70% = 42 months' worth of full benefit. From then on, the later claimer receives 30 percentage points more each month. 42 ÷ 0.30 = 140 months, so they draw level at about age 78 and 8 months.
• 67 versus 70. By 70, the 67 claimer has received 36 months' worth. The 70 claimer then gets 24 points more a month. 36 ÷ 0.24 = 150 months, about age 82 and 6 months.
• 62 versus 70. By 70, the 62 claimer has 96 × 70% = 67.2 months' worth. The gap is then 54 points a month. 67.2 ÷ 0.54 = 124.4 months, about age 80 and 4 months.

This simple version ignores taxes, what early payments could earn if invested, and benefits paid to a surviving spouse, which can be higher when the higher earner delays. Cost-of-living adjustments apply to both choices, so they barely move these ages. The real decision rests on health, family longevity, other income and whether a spouse depends on your benefit.

FERS retirement calculator: what federal employees can model here

The Federal Employees Retirement System has three parts: a basic annuity, which is a pension, Social Security, and the Thrift Savings Plan, or TSP, a defined contribution plan similar to a 401(k). The Retirement Calculator can project the TSP part. It does not calculate the basic annuity or Social Security.

For FERS employees, the agency deposits an automatic 1% of basic pay into the TSP whether or not you contribute, then matches dollar for dollar on the first 3% of pay you contribute and 50 cents on the dollar on the next 2%. Contribute 5% and the agency puts in 5% as well: 1% automatic, plus 3%, plus 1%. These rules are set in federal law. Confirm current details with the TSP and OPM.

On a hypothetical $80,000 of basic pay:

You contribute	Your deposit per month	Agency deposit per month
0%	$0	$66.67 (1%)
1%	$66.67	$133.33 (2%)
3%	$200.00	$266.67 (4%)
4%	$266.67	$300.00 (4.5%)
5%	$333.33	$333.33 (5%)

To project a TSP balance, put your deposit in the monthly contribution field and the agency deposit in the employer match field. At 5% on this salary, $333.33 plus $333.33 from age 30 to 65 at a 7% assumed return projects to $666.66 × 1,801.05 = $1,200,691.

The basic annuity is a separate calculation. It is generally 1% of your high-3 average salary for each year of creditable service, or 1.1% if you retire at 62 or later with at least 20 years of service. With a hypothetical high-3 of $80,000 and 25 years, that is $80,000 × 25 × 1% = $20,000 a year, or $22,000 at the 1.1% rate. Eligibility depends on your age and service, and retiring before 62 with fewer years can reduce the annuity, so confirm your own figures with OPM. Once you have an estimate, subtract the annuity and your Social Security estimate from your spending target, and the remainder is what the TSP needs to cover.

Does the retirement projection account for inflation?

Not as a separate input. The projection is in whatever kind of dollars your return represents.

• Enter a nominal return, one that includes inflation, and the result is in future dollars.
• Enter a real return, one with inflation already taken out, and the result is roughly in today's dollars. This also quietly assumes your monthly deposit rises with inflation each year.

To convert a nominal return to a real one, divide rather than subtract: real return = (1 + nominal return) ÷ (1 + inflation) − 1. With a hypothetical 9% nominal return and 3% inflation, the real return is 1.09 ÷ 1.03 − 1 = 5.83%, a little under the 6% that simple subtraction suggests.

The effect over decades is large. At a hypothetical 3% inflation, $1,000,000 in 35 years buys what $1,000,000 ÷ 1.03^35 = $355,383 buys today. Whichever return you enter, compare the projected balance with a spending target in the same kind of dollars.

What the projection assumes and leaves out

A projection is a model, not a promise. The Retirement Calculator assumes:

• The same return every month, compounded monthly. Real markets rise and fall, and once you start withdrawing, the order of those returns matters a great deal.
• The same monthly deposit every month until retirement, with no raises or contribution increases.
• Ages in whole years, with deposits at the end of each month.

It does not include:

• Taxes on contributions, growth or withdrawals
• Fund or plan fees, unless you subtract them from the return
• Annual contribution limits, which the IRS sets and adjusts, so check that your planned contributions fit within the current limits
• Loans, hardship withdrawals or cash-outs before retirement
• Social Security, a pension or the FERS basic annuity
• The payout phase, meaning what happens to the balance once you start withdrawing

Revisit the projection whenever your salary, your contribution rate or your plans change.

How to grow your retirement faster

• Get the full employer match. On the illustrative 50% formula it is an immediate 50% on those dollars, as long as it vests.
• Raise your contribution rate by 1% a year, or every time you get a raise. The calculator uses a flat amount, so rerun it with the new figure each time.
• Start now. In the table above, ten years of delay a little more than doubles the monthly amount needed to reach the same balance.
• Use tax-advantaged accounts such as a 401(k), TSP or IRA, so more of the growth stays yours.
• Keep fees low. One percentage point of cost is $188,172 on $500 a month over 35 years, on the assumptions above.
• Do not cash out when you change jobs. Rolling the balance into a new plan or an IRA keeps it compounding. Cashing out before 59½ generally means income tax plus a 10% additional tax, and the lost compounding costs more than either.

Common retirement projection mistakes

Treating the projection as a forecast. It is the result of an assumed return. Run a lower return as well and plan for the range.

Mixing nominal and real dollars. A projection built on a nominal return compared with a spending target in today's dollars will make you look better prepared than you are.

Comparing Traditional and Roth balances directly. A Traditional balance still carries the tax you will owe on withdrawal. A Roth balance does not.

Counting a match you have not vested. If you may leave before the vesting schedule completes, the unvested part is not yours.

Ignoring fees. A 1% cost is a full percentage point off the return, every year, on the whole balance.

Using 4% for a very long retirement. The rule was tested over 30 years. A longer retirement generally needs a lower starting withdrawal.

Leaving out other income. Social Security and any pension reduce what savings must cover. Setting a target without them can overstate what you need by a wide margin.

The bottom line

A 401(k) projection is a starting balance and a stream of monthly deposits compounded at an assumed return, and the arithmetic is simple enough to check by hand. The inputs you control matter most: capture the full match, start as early as you can, raise contributions over time and keep costs down. The input you do not control, the return, deserves a range rather than one number. Then work from the other end: estimate your spending, subtract Social Security and any pension, and turn the remainder into a target. Model your own trajectory in the Retirement Calculator. For benchmarks by age, see our guide on how much to save for retirement by age.

Related calculators

• Compound Interest Calculator: growth of a starting amount plus monthly contributions over a set number of years
• Investment ROI Calculator: net gain, total return and annualized return from a starting and ending value
• Savings Goal Calculator: how long it takes to reach a target at a given monthly contribution
• Take-Home Pay Calculator: your paycheck after tax, including pre-tax deductions such as Traditional 401(k) contributions