Estimate your retirement savings with employer match and compound growth.
A 401(k) is a tax-advantaged retirement savings plan offered by employers. Contributions are made pre-tax from your paycheck, reducing your taxable income in the current year. Your investments grow tax-deferred until withdrawal in retirement. Many employers offer a matching contribution — essentially free money that can significantly accelerate your retirement savings.
If your employer matches 4% of your salary and you earn $75,000, that's an extra $3,000 per year of free money. Over a 35-year career with 7% annual returns, that employer match alone could grow to over $400,000. Always contribute at least enough to capture the full employer match before considering other investment vehicles.
A Traditional 401(k) offers tax-deductible contributions now but taxes withdrawals in retirement. A Roth 401(k) uses after-tax money but provides tax-free withdrawals in retirement. If you expect to be in a higher tax bracket in retirement, Roth may be better. If you need tax savings now, Traditional is likely the better choice. Many advisors recommend splitting contributions between both.
A 401(k) is an employer-sponsored retirement savings plan that allows you to contribute pre-tax dollars from your paycheck. Many employers offer matching contributions up to a certain percentage. Your investments grow tax-deferred until you withdraw them in retirement.
Financial advisors typically recommend contributing at least enough to get the full employer match (free money). Beyond that, aim for 10-15% of your salary. In 2026, the IRS contribution limit is $23,500 for those under 50, and $31,000 for those 50 and older (catch-up contribution).
An employer match is when your company contributes additional money to your 401(k) based on your own contributions. A common match is 50% of your contributions up to 6% of salary, or 100% up to 3-4%. Always contribute at least enough to get the full match — it is essentially free money.
You can withdraw penalty-free starting at age 59½. Withdrawals before that age incur a 10% early withdrawal penalty plus income taxes. Required Minimum Distributions (RMDs) begin at age 73. Some plans allow hardship withdrawals or loans against your balance.
The 4% rule suggests you can withdraw 4% of your retirement savings in your first year of retirement, then adjust for inflation each subsequent year, with a high probability your money will last 30 years. For example, a $1M nest egg supports ~$40,000/year in withdrawals.