401(k) Contribution Impact Calculator
See how changing your 401(k) contribution affects take-home pay and projected retirement balance.
Includes employer match and 20-year growth view.
How 401(k) Contributions Work A 401(k) is a pre-tax retirement account offered by employers. Contributions reduce your taxable income, so you pay less in federal income tax today. Your money then grows tax-deferred until retirement.
The Tax Advantage If you earn $75,000 and contribute 10% ($7,500), your taxable income becomes $67,500. At a 22% marginal rate, you save $1,650 in federal taxes. Your take-home only drops by $7,500 - $1,650 = $5,850, not the full $7,500.
Employer Match — Free Money If your employer matches 50% of your contributions up to 6% of salary:
- Contribute 6% ($4,500) → employer adds $2,250 per year
- That is a 50% instant return on your contribution
- Always contribute at least enough to capture the full employer match
Future Value Formula (Annual Contributions) FV = Annual Contribution × ((1 + r)^n - 1) / r Where r = annual return rate, n = years to retirement
2024 Contribution Limits Employee limit: $23,000 ($30,500 if age 50+) Total combined limit (with employer match): $69,000
Key Insight Starting at 25 vs. 35 with the same monthly contribution typically results in more than double the final balance — due to compound growth over 10 extra years.