401(k) Growth Projector Formula
Understand the math behind the 401(k) growth projector. Each variable explained with a worked example.
Formulas Used
Projected Balance
future_balance = monthly_rate > 0 ? current_balance * pow(1 + monthly_rate, num_months) + total_monthly * (pow(1 + monthly_rate, num_months) - 1) / monthly_rate : current_balance + total_monthly * num_monthsYour Contributions
total_contributions = annual_contribution * years_to_retireEmployer Match Total
total_match = employer_match_annual * years_to_retireInvestment Growth
total_growth = (monthly_rate > 0 ? current_balance * pow(1 + monthly_rate, num_months) + total_monthly * (pow(1 + monthly_rate, num_months) - 1) / monthly_rate : current_balance + total_monthly * num_months) - current_balance - (annual_contribution + employer_match_annual) * years_to_retireVariables
| Variable | Description | Default |
|---|---|---|
current_balance | Current 401(k) Balance(USD) | 50000 |
annual_contribution | Annual Contribution(USD) | 12000 |
employer_match_pct | Employer Match Rate(%) | 50 |
match_limit_pct | Match Up To (% of salary)(%) | 6 |
salary | Annual Salary(USD) | 80000 |
annual_return | Expected Annual Return(%) | 7 |
years_to_retire | Years Until Retirement(years) | 25 |
monthly_rate | Derived value= annual_return / 12 / 100 | calculated |
num_months | Derived value= years_to_retire * 12 | calculated |
employer_match_annual | Derived value= min(annual_contribution, salary * match_limit_pct / 100) * employer_match_pct / 100 | calculated |
total_monthly | Derived value= (annual_contribution + employer_match_annual) / 12 | calculated |
How It Works
401(k) Growth Projection
Your 401(k) grows through three sources: your contributions, employer match, and investment returns.
Formula
FV = Current x (1 + r)^n + Monthly x [(1 + r)^n - 1] / r
Employer Match
A common match is 50% of your contributions up to 6% of salary. This is essentially free money for retirement.
Worked Example
$50,000 current balance, $12,000/year contributions, 50% match up to 6% of $80,000 salary, 7% return, 25 years.
current_balance = 50000annual_contribution = 12000employer_match_pct = 50match_limit_pct = 6salary = 80000annual_return = 7years_to_retire = 25
- 01Employer match = min(12000, 4800) x 50% = $2,400/year
- 02Total monthly = (12,000 + 2,400) / 12 = $1,200
- 03Current balance grows: $50,000 to ~$271,400
- 04Contributions grow to ~$912,000
- 05Total projected: ~$1,183,000
Ready to run the numbers?
Open 401(k) Growth Projector