Enter your salary, contribution rate, and employer match formula to project the future value of these modeled contributions, with employee deposits, employer match, and investment growth shown separately.
Your employer's match formula has two parts: the match rate (how many cents they contribute per dollar you contribute) and the match cap (the maximum percentage of salary they will match on). Combined monthly contributions compound at your expected annual return over the investment period.
On an $80,000 salary with a dollar-for-dollar match capped at 4%, the annual employer contribution is $3,200 when the employee defers at least 4%. Actual deposits depend on the plan's definition of eligible compensation, per-pay-period method, true-up provision, vesting, and annual limits. Run several return assumptions; the selected rate is a scenario, not a forecast.
Both options shelter investment activity inside the plan. Traditional deferrals generally postpone income tax until distribution; Roth deferrals use after-tax wages and qualified distributions are generally tax-free.
| Traditional 401k | Roth 401k | |
|---|---|---|
| Contributions | Pre-tax (lowers taxable income now) | After-tax (no upfront deduction) |
| Withdrawals in retirement | Taxed as ordinary income | Tax-free (qualified withdrawals) |
| Best for | Expect lower bracket in retirement | Expect higher bracket in retirement |
| Lifetime RMDs for original owner? | Generally yes | No for designated Roth 401(k) accounts from 2024 |
| Employer contributions | Usually pre-tax | May be designated Roth if the plan permits and requirements are met |
The better choice depends on current and future marginal tax rates, plan fees, state taxes, and withdrawal plans. SECURE 2.0 permits a plan to offer fully vested Roth treatment for matching or nonelective employer contributions; availability is plan-specific. Use our Roth vs Traditional 401k Calculator to run a side-by-side comparison with your specific income and tax assumptions.
Traditional 401(k) elective deferrals generally reduce wages subject to current federal income tax. They do not reduce wages subject to Social Security or Medicare tax, and state treatment can differ.
In this simplified 22% federal-plus-5% state marginal-rate illustration, raising the contribution from 4% to 6% reduces current take-home by about $1,168 rather than the full $1,600 deferral. Actual withholding and tax savings depend on filing facts and state law. Before increasing contributions, it is worth checking whether high-rate debt should come first. A debt snowball calculator can show you how fast credit card debt can be eliminated before redirecting more into retirement savings.
A taxable 401(k) distribution before age 59½ is generally subject to ordinary income tax and may also face a 10% additional tax unless an exception applies. Roth basis, qualified distributions, rollovers, loans, and statutory exceptions require separate treatment.
| Withdrawal | 10% Penalty | 22% Fed Tax | You Receive |
|---|---|---|---|
| $10,000 | $1,000 | $2,200 | $6,800 |
| $20,000 | $2,000 | $4,400 | $13,600 |
| $50,000 | $5,000 | $11,000 | $34,000 |
| $100,000 | $10,000 | $22,000 | $68,000 |
Illustration only: assumes the entire distribution is taxable, a 22% federal marginal rate, no exception to the 10% additional tax, and no state tax. Actual treatment can differ.
A direct rollover of pre-tax money to a pre-tax account in a traditional IRA or another eligible employer plan generally avoids current withholding and keeps the transfer tax-deferred. Moving pre-tax money to a Roth IRA or designated Roth account is generally a taxable conversion; Roth IRA contribution-income limits do not prohibit conversions. Confirm the tax treatment and any plan fees before choosing a destination.
Assumptions: $80,000 salary, 100% employer match up to 4% of salary, 7% annual return, 30-year timeframe. The employer match caps at 4% regardless of how much you contribute beyond that.
| Your Contribution | Your Annual | Employer Match | Balance at 30 Years |
|---|---|---|---|
| 3% | $2,400 | $2,400 | ~$491,000 |
| 6% | $4,800 | $3,200 | ~$818,000 |
| 10% | $8,000 | $3,200 | ~$1,146,000 |
| 15% | $12,000 | $3,200 | ~$1,555,000 |
In this fixed scenario, moving from 3% to 6% raises the projected balance by about $327,000, partly because it captures another $800 per year of employer match. Moving from 6% to 10% adds about another $327,000 while the modeled match stays flat. These are deterministic scenario outputs, not expected balances or guaranteed returns.
Researches and verifies the formulas, methodology, and source data behind each calculator on CalculatorFlux. All tools are built and checked against the cited references before publication.