Question 1

What is a 401k calculator?

Accepted Answer

A 401k calculator projects how much your 401(k) retirement account will be worth at retirement. You enter your salary, contribution percentage, employer match details, current age, retirement age, and expected annual return. The calculator compounds your contributions and employer match annually and shows your projected balance — the amount available to withdraw in retirement (before taxes, since 401k withdrawals are taxed as ordinary income).

Question 2

How much can I contribute to a 401k in 2024?

Accepted Answer

The 2024 IRS employee contribution limit is $23,000 per year. If you are age 50 or older, you can contribute an additional $7,500 catch-up contribution, for a total of $30,500. This limit applies only to your employee contributions — employer matching contributions are on top of this and do not count toward your $23,000 limit. The total combined limit (employee + employer) is $69,000 in 2024.

Question 3

How does employer 401k matching work?

Accepted Answer

The most common employer match is 50% of your contribution, up to 6% of your salary. This means if you earn $80,000 and contribute 6% ($4,800), your employer adds 50% of that ($2,400) — a guaranteed 50% return on that portion of your savings before any investment growth. The key rule: you must contribute at least up to the match ceiling to capture the full match. Not doing so is leaving free money on the table.

Question 4

What return rate should I use for a 401k projection?

Accepted Answer

For a stock-heavy 401(k) invested in broad index funds, 7% annual return is a reasonable real-terms estimate (S&P 500 historical average is ~10.7% nominal minus ~3% inflation equals ~7.5% real). The default in this calculator is 7%. If your 401(k) is a mix of stocks and bonds, 5–6% is more conservative and appropriate. Never use the nominal rate for long-horizon planning without accounting for inflation.

Question 5

Is 401k money taxed when I withdraw it?

Accepted Answer

Yes — traditional 401(k) withdrawals are taxed as ordinary income in retirement. You contribute pre-tax dollars today (reducing your taxable income now), but pay income tax when you withdraw. This is the opposite of a Roth IRA, where you pay tax now and withdraw tax-free. For most people in their peak earning years, the pre-tax deduction today is valuable — but in retirement you will owe income tax on every dollar withdrawn. This calculator shows your pre-tax balance.

Question 6

What happens if I withdraw from my 401k before retirement?

Accepted Answer

Withdrawals before age 59½ trigger a 10% early withdrawal penalty on top of ordinary income tax. For example, withdrawing $50,000 early in the 22% tax bracket costs $16,000 in taxes and penalties — leaving you with $34,000. There are exceptions for certain hardship situations and the Rule of 55 for those who leave their job at 55 or older. The general rule: treat your 401(k) as completely inaccessible until retirement.

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