- 401(k) savings to date
- Your contribution
- Employer contribution
- Investment earnings
How to use 401k calculator
401(k) savings calculator helps you estimate your 401(k) savings at retirement based on your annual contribution and investment returns from now until retirement. This calculator takes into account your current age, 401(k) savings to date, current annual salary, frequency of your pay (Weekly, Bi-Weekly, Semi-Monthly, Monthly), your contribution and employer’s contribution information along with your estimates for annual salary hike rate, rate of return on investments and retirement age to determine the amount that you can amass in your 401(k) account at retirement. It also displays charts that depict the savings break-up and accumulated savings until retirement. The savings table shows salary, contributions, interest earnings and closing balance every year from now until retirement.
Enter the following information in the 401k calculator:
- Your age – Your current age is probably the most important factor that determines the size of your nest egg. The earlier you start participating in your employer’s 401(k), the more you have at retirement.
- Your current annual salary – Your gross annual salary with your employer.
- Pay Period – What is the frequency of your pay? Options include Weekly, Bi-Weekly (i.e., 26 times in a year), Bi-Monthly (i.e., 24 times in a year) and Monthly.
- Expected annual salary increase – Although it is expected that the salary will increase in line with the rate of inflation, it also depends on industry in general and your own skill and qualification in particular. We assume that your salary will increase at this rate uniformly throughout your working years.
- Age of retirement – When do you want to retire? This helps determine how many more years are remaining to grow your 401(k) account.
- Your 401(k) savings to date – How much have you managed to save until now? Include the combined total amount from all your 401(k) accounts (if you have multiple accounts).
- Expected annual rate of return – Expected rate of return on your 401(k) investments. Enter a realistic expectation based on your investment products (stocks, mutual funds, bonds etc.) and your investment style (i.e., risk tolerance).
- Your annual contribution – Percentage of your salary that you contribute towards your 401(k) account. The higher you contribute, the more your will have at retirement (given a steady positive rate of return).
- Employer match and maximum – What percentage of your contributions and up to what percentage of your annual salary does your employer match? Employer’s match is the additional contribution made to your fund by your employer. It is usually a certain percentage of your contribution. The maximum percentage of your salary matched by your employer is irrespective of your contribution. For example, typical employer matches are a) 50% of employee contributions up to 6% of the gross salary OR b) 100% of employee contributions up to 3% of gross salary.
2014 Contribution Limits
Note that the annual contribution amount that you enter above should be within the 401(k) contribution limits set by the IRS. 2014 contribution limits for traditional or safe harbor 401(k) plan is $17,500 and SIMPLE 401(k) plan is $12,000. For participants who are age 50 or older at the end of 2014, catch-up contribution limits for traditional or safe harbor 401(k) is $5,500 and SIMPLE 401(k) is $2,500.
|Age (at the end of Year 2014)||Traditional or Safe Harbor 401(k)||SIMPLE 401(k)|
|Contribution Limit||Catch-up Limit||Contribution Limit||Catch-up Limit|
|< 50 years||$17,500||$0||$12,000||$0|
|50 years or older||$17,500||$5,500||$12,000||$2,500|
- Jun 05 2014Deferred Annuities – Know the Basics
- Jun 05 2014Top 5 income payment options available with Immediate Annuity
- Jun 05 2014Immediate Annuity checklist – Important points to consider when purchasing SPIA
- Jun 05 2014Retirement Planning with Immediate Annuities
- May 02 2014Social Security – Is the system crumbling?