A 401(k) can be one of your best tools for creating a secure retirement. It provides you with two important advantages. First, all contributions and earnings to your 401(k) are tax-deferred. You only pay taxes on contributions and earnings when the money is withdrawn. Second, many employers provide matching contributions to your 401(k) account.By changing any value in the following form fields, calculated values are immediately provided for displayed output values. Click the view report button to see all of your results.? Your total is $980,218 after 35 years.*indicates required.401(k) Employee Savings Plan:
?Percent to contribute:*Enter an amount between 0% and 100%0%33%66%100%?Annual salary:*Enter an amount between $0 and $1,000,000$0$10k$100k$1m?Annual salary increase:*Enter an amount between 0% and 12%0%4%8%12%?Current age:*Enter an amount between 15 and 9015406590?Age at retirement:*Enter an amount between 10 and 9010366390?Current 401(k) balance:*Enter an amount between $0 and $10,000,000$0$100k$1m$10m?Annual rate of return:*Enter an amount between 0% and 20%0%4%8%12%Total employee contributions:$182,000401(k) Employer Match:
Definitions
Percent to contribute
This is the percentage of your annual salary you contribute to your 401(k) plan each year.
Your annual 401(k) contribution is subject to maximum limits established by the IRS. The annual maximum for 2020 is $19,500. A “catch-up” provision allows employees age 50 and older to contribute an additional $6,500 into their 401(k) account. Employer contributions do not count toward the IRS annual contribution limit.
Employees classified as “Highly Compensated” may be subject to additional limits based on their employer’s overall 401(k) participation. If you expect your salary to be $130,000 or more in 2020 or was $125,000 or more in 2019, you may need to contact your employer to see if these additional contribution limits apply to you.
Annual salary
This is your annual salary from your employer, before taxes and other benefit deductions. Since your contribution and employer match are based on the salary paid to you by your employer, do not include any income you may receive from sources other than your employer.
Current age
Your current age.
Age at retirement
Age at which you plan to retire. This calculator assumes that the year you retire, you do not make any contributions to your 401(k). For example, if you retire at age 65, your last contribution occurs when you are actually 64.
Current 401(k) balance
The starting balance or current amount you have invested or saved in your 401(k).
Annual rate of return
The annual rate of return for your 401(k) account. This calculator assumes that your return is compounded annually and your deposits are made monthly. The actual rate of return is largely dependent on the types of investments you select. The Standard & Poor’s 500® (S&P 500®) for the 10 years ending December 31st 2019, had an annual compounded rate of return of 13.2%, including reinvestment of dividends. From January 1, 1970 to December 31st 2019, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.7% (source: www.standardandpoors.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a financial institution may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.
It is important to remember that these scenarios are hypothetical and that future rates of return can’t be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return does not reflect sales charges and other fees that investment funds and/or investment companies may charge.
Annual salary increase
The annual percentage you expect your salary to increase. The calculator assumes that your salary will continue to increase at this rate until you retire.
Employer match
The percentage of your annual 401(k) contributions your employer will match. These contributions are often capped. Please read the definition for “Employer maximum” for more information. Also note employer contributions do not count toward the IRS annual contribution limit.
Matching contributions can also be subject to a vesting schedule. See your plan information for details.
Employer maximum
This is the maximum percent of your salary matched by your employer, regardless of the amount you decide to contribute.
For example, let’s assume your employer provides a 50% match on the first 6% of your annual salary that you contribute to your 401(k). If you have an annual salary of $100,000 and contribute 6%, your contribution will be $6,000 and your employer’s 50% match will be $3,000 ($6,000 x 50%), for a total of $9,000. If you only contribute 3%, your contribution will be $3,000 and your employer’s 50% match will be $1,500, for a total of $4,500.
If you increase your contribution to 10%, you will contribute $10,000. Your employer’s 50% match is limited to the first 6% of your salary then limits your employer’s contribution to $3,000 on a $100,000 salary. The total 401(k) contribution from you and your employer would therefore be $13,000.
Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues. The S&P 500 is an unmanaged index of 500 widely held stocks. It is not possible to invest directly in an index. The performance mentioned does not include fees and charges which would reduce an investor returns. While interest on municipal bonds is generally exempt from federal income tax, it may be subject to the federal alternative minimum tax, or state or local taxes. Profits and losses on federally tax-exempt bonds may be subject to capital gains tax treatment. Fixed income risks include, but are not limited to, changes in interest rates, liquidity, credit quality, volatility, and duration.
Calculators are provided by an independent third party and are being made available to you as self-help tools for your independent use and are not intended to provide investment advice or be representative of actual results. We do not guarantee their applicability or accuracy in regards to your individual circumstances. The determinations made by these calculators should not be construed as guarantees or projections. Moreover, the reasonableness of certain information may change over time because of changes in tax law, investment trends and your personal circumstances. The information contained here is based on current law and has been obtained from sources believed to be reliable, but we do not guarantee its accuracy. Investment results can vary considerably depending on the type of securities involved, general market conditions and other factors. It is important that you periodically review and update your plans. Raymond James does not provide tax or legal advice. You should contact your tax or legal advisor concerning your particular situation. All investments carry a degree of risk, and past performance is not a guarantee of future results.