Don’t be deceived by more complex 401k calculators that include more variables. It might appear more accurate but that accuracy deceives.Your objective is to calculate the compound interest growth and future...show more instructions
What Will Be The Future Value Of Your 401k?
Will your 401k savings be enough to secure your financial future?
The last thing you’d want is to reach retirement age realizing that you’re going to need to work for another 20 years.
Proper financial planning results in a secure future, and your 401k can be a key contributor. This simple 401k Calculator will show what role your 401k will play in plotting your path to your golden years.
Not A Math Whiz? No Worries!
You can find out how much your 401k will grow without the help of a financial wizard. Simply provide the required inputs variables and quickly calculator what your 401k will grow to in the future.
Play around with the actuals (for example, the amount you already save each month) and the extras (for example, the additional contribution that you are willing to make to your 401k) to model various “what if” scenarios to reach your financial goals. This Simple 401k Calculator can be your best tool for creating a secure retirement. The following step-by-step procedure will show you how…
Calculating the compound interest growth and future value of your monthly contributions is as simple as entering your beginning balance, the combined contributions (yours, your employer, catch-up), an estimate of your return on investment, and the number of years until retirement.
Related: 5 Rookie Financial Planning Mistakes That Cost You Big-Time (and what to do instead!) Explained in 5 Free Video Lessons
Anyone Can Be Rich Someday
A middle-aged factory worker with another thirty years of active service can easily plan to create an effective saving scheme for his retirement.
All he needs to do is to try and raise his contributions to his 401k plan. Whether his employer decides to match his contribution doesn’t control his final outcome or the amount of growth his money will achieve.
Likewise, you can be rich someday by increasing contributions to your 401k.
How can you find extra money to contribute toward your 401k? Here are some places to start:
- Increase your income – Take an extra job or ask for a pay raise. You might find that working as a freelancer or entrepreneur will result in more earnings than working for a business at hourly wages.
- Cut your spending – Many people overspend in these key areas: food, clothing, transportation, shelter, and utilities. Therefore, try cutting out unhealthy snack foods, decrease trips to the mall to shop for the latest styles, opt for a used vehicle over a brand new one, don’t buy a new house unless you really need extra space (better yet, downsize), and find more efficient ways to heat and cool your home.
Variables To Consider – And Not
To many, what matters most is getting a ballpark figure of how much money they will have when they hit their 60s — a simple and matter-of-fact figure in dollars!
While there are only four input variables in this calculator, it’s important to consider how you arrive at each variable. For example, when figuring out your total monthly contributions, include:
- Your average monthly contributions.
- Your employer’s average monthly contributions – sometimes called a “match.”
- Any catch-up contributions in order to reach your desired future goal.
- Limitations due to being a highly-compensated employee.
Only focus on the variables presented in this calculator. Never go into the details of something that is completely out of your control like inflation, salary growth, changes in federal law, or changes in employment policies.
This 401k contribution calculator helps streamline the process of figuring out how much you should contribute toward your 401k to meet your future goal. It simulates that if you contribute “X” that you’ll end up with “Y” in a future date, without unnecessary complication.
Related: How Your Financial Advisor is Taking 75% of Your Retirement Income (or More!) Video, PDF download, or Audio.
Simply take a few moments to run a couple of scenarios and figure out how much you should be contributing toward your 401k – preparing now will result in a more rewarding retirement later.
Simple 401k Calculator Terms & Definitions
- 401k – a tax-qualified, defined-contribution pension account as defined in subsection 401(k) of the Internal Revenue Taxation Code.
- Inflation – the rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.
- Federal Contribution Limit – a specified amount set by the Federal government as to the maximum contribution a person can put into, in this case, their 401k account.
- Catchup Contribution – an option given to employees who have reached the age of 50 to put additional contributions into their 401k account – this might also be considered to be simply raising your contribution up, not exceeding the maximum contribution limit, in order to better reach a goal.
- Employer Contribution – the amount employers pay as a match to the contribution of their employees to their 401k account.
- Compound Interest – when interest is added to the principal of a loan or deposit, so that interest earns interest on a recurring basis.
Related Retirement Calculators:
- Ultimate Retirement Calculator: It’s called the ultimate retirement calculator because it does everything the others do and a whole lot more.
- Retirement Withdrawal Calculator: How much can I afford to withdraw each month given the retirement savings I have accumulated – both before and after inflation?
- Simple Retirement Savings Calculator: How long will it take me to reach my retirement savings goal given my current savings balance and my monthly deposits? Solves for time.
- Retirement Investment Calculator: How much investment should I make each month to reach my desired retirement savings goal given my current savings balance and expected retirement date? Solves for amount to invest.
- Millionaire Calculator – How To Retire A Millionaire: So you wanna be a millionaire? This fun calculator will tell you when it will happen and what a million dollars will be worth by then after adjusting for inflation.
- How To Save Money For Retirement – The Easy Way!: If you have problems saving for retirement then this calculator will show you an easy way.
- 401(k) Early Withdrawal Calculator: What is the financial cost of taking a distribution from my 401(k) or IRA versus rolling it over into another tax deferred account?
- Taxable vs. Tax Deferred Investment Growth Calculator: How will my future value and investment return differ between taxable and tax deferred investing?
- Interest Calculator – Simple & Compound Interest: Compares simple monthly interest income to long term compound growth for surprising results.
- Roth IRA Calculator: What is the after tax impact of switching from a traditional IRA to a Roth IRA?
- Present Value of Annuity Calculator: What is the present value of a series of equal cash flows to be received in the future?