401(k) Calculator — Methodology

How This Calculator Works

The 401(k) Calculator projects your balance at retirement from your current balance, your own salary deferrals, and your employer's match. Each year it caps your deferral at the IRS limit for your age, adds the employer match, and compounds the balance at the return you enter.

It also reports the employer match you leave unclaimed each year if you contribute less than the percentage your employer will match.

Inputs and Assumptions

• Current age and retirement age: Set the number of years projected. Each projected year is the year you reach the age shown in the year-by-year table: your current age plus one in the first year.
• Current balance and salary: Your starting point. Salary grows each year by the raise you enter.
• Your contribution (% of salary): Converted to dollars and capped at the IRS elective-deferral limit.
• Employer match rate and cap: For example, "50% up to 6% of salary" means the employer adds 50 cents per dollar you defer, on deferrals up to 6% of pay. Only dollars you actually defer are matched (after the IRS deferral limit), and pay above $360,000 (the 2026 IRC §401(a)(17) limit) does not count toward the match.
• Expected annual return: Applied to the whole balance every year. Use a nominal return if you want a nominal balance, or a real (after-inflation) return for today's dollars.

Assumptions: contributions are added at the end of each year, after that year's growth. The same return applies every year, so the result is a single deterministic path with no market volatility.

Formula

// age = the age you reach in that year (IRC §414(v): "attain age 50 by the end of the taxable year")
irsLimit(age) = $24,500                 (under 50)
             = $24,500 + $8,000 = $32,500   (50 to 59, and 64 and over)
             = $24,500 + $11,250 = $35,750   (60 to 63, SECURE 2.0 §109)

each year:
  employee = min(salary × contribution%, irsLimit(age))
  matchPay = min(salary, $360,000)          (IRC §401(a)(17), 2026)
  employer = min(employee, matchCap% × matchPay) × matchRate%
  balance  = balance × (1 + return) + employee + employer
  salary   = salary × (1 + raise)

matchable      = min(matchCap% × matchPay, irsLimit(age))
unclaimedMatch = (matchable − min(employee, matchCap% × matchPay)) × matchRate%
fullMatchAt    = matchable ÷ salary   (the contribution % that earns the whole match)

Data Sources

• IRS Notice 2025-67 — 2026 elective-deferral limit of $24,500 (IRC §402(g)) and the age-50 catch-up of $8,000 (IRC §414(v)), as announced in the IRS release "401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500".
• IRS Notice 2025-67 — the 2026 annual compensation limit under IRC §401(a)(17), $360,000.
• IRS, "401(k) plans - deferrals and matching when compensation exceeds the annual limit" — deferrals may continue on pay above the limit, but the match formula can use pay only up to it, and only actual deferrals are matched.
• SECURE 2.0 Act of 2022, §109 — the higher catch-up for ages 60 to 63 ($11,250 for 2026, IRS Notice 2025-67), applied in the years you turn 60, 61, 62 or 63.
• 26 U.S.C. §414(v)(5)(A) and (v)(2)(B)(i) — the catch-up is open to a participant "who would attain age 50 by the end of the taxable year", and the higher amount to one "who would attain age 60 but would not attain age 64 before the close of the taxable year".

Limitations

• The IRS limits are held at their 2026 amounts for every projected year. In reality they are indexed to inflation, so the cap in later years will be higher.
• Ages are whole years: the first projected year is taken to be the year you turn your current age plus one. If that birthday falls next calendar year rather than this one, the catch-up and the ages 60–63 amount start one year early for you.
• The overall annual-additions limit on employee plus employer contributions (IRC §415(c)) is not applied. It only binds for very high savers or large employer contributions.
• Does not model the SECURE 2.0 rule that requires catch-up contributions of higher earners to be made as Roth.
• Employer match is modelled as a single rate up to a single cap. Tiered formulas (for example 100% on the first 3% and 50% on the next 2%), vesting schedules and profit-sharing contributions are not modelled.
• The match is worked out on the year's total deferrals, as if your plan makes a year-end true-up. A plan that matches each paycheck without a true-up pays less if you reach the IRS limit early in the year.
• The $360,000 pay limit is held at its 2026 amount for every projected year, like the deferral limits.
• Does not model taxes, fees, loans or withdrawals. Traditional and Roth 401(k) deferrals are treated the same way; the balance shown is before any tax due on withdrawal.
• A single fixed return understates the range of outcomes. Real markets vary year to year.

Last Updated

October 2026 — Methodology page published. Limits shown are read from the same constants the calculator uses, so this page cannot drift from the engine.

October 2026 — The employer match now follows the IRS rules. It was worked out as salary × the matched percentage, which matched dollars the IRS deferral limit had stopped and pay above the §401(a)(17) limit. For example, on $500,000 of pay with 10% elected and a 50% match up to 5%, it showed $12,500 a year; the plan can match at most $9,000 (50% × 5% × $360,000).

October 2026 — The age-50 catch-up now starts in the year you turn 50, as IRC §414(v) allows; it started a year later. The higher ages 60–63 catch-up ($11,250 in 2026) is now applied in the years you turn 60 to 63; it was shown for reference only. Someone who is 49 now and turns 50 in the first projected year can defer $32,500 that year, not $24,500.