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You are currently viewing Online 401k Calculator: Calculate the return on 401k. Use the Tax Form Calculator to calculate your Federal and State Tax Return. Updated with 2016/2017 tax tables.

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401k Retirement Calculator

The 401k Retirement Calculator is provided as part of our suite of retirement calculators which have been specifically designed to allow you to calculate the value of your retirement fund when it reaches maturity. We also allow you to compare the effect of tax and other metrics on your retirement fund so you can evaluate which retirement plan is best for you. Financial planning is import if you want to have a healthy and comfortable retirement, the retirement planning calculators are here to support your financial planning and provide a clear calculation of the amount of money you need to invest now and how that will support you in future years.

401k is a superb retirement scheme, particularly if you are a higher rate tax payer. The investments you make into your 401k are tax free, tax is deducted when you draw funds from your 401k retirement fund. So, if you pay 50% income tax now, you may only attract 20% tax in retirement. This means you can avoid large tax bills and build a nice pension pot whilst doing so.

401k is also popular with employers who can also match your contributions either to the full amount of fractions thereof. You will find the 401k Retirement Calculator straightforward to use if you are familiar with 401k, if not, we have provided some notes on how to use the 401k Calculator further down this page, along with some further information on 401k.

The calculator below allows you to enter details of your plan, and have an indication of the payments you can plan to take out of the fund once retired.

There are four example buttons, each one has a different scenario to show how this calculator can be used.

Explanations for each of the boxes below will be displayed as you roll the mouse over the value boxes.

Retirement Fund: 401k Calculator
Current Retirement Plan
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Results and effect of tax in retirement
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Annual payout
Calculator tips
[ Roll mouse over inputs for related information ]
Current Value of Fund - The value of the fund today, or at the start of the plan

Calculate your tax free retirement fund with the 401k Calculator, view calculation breakdown and Tax Analysis

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401k Retirment Plan snapshot

Understanding 401k and the 401k Calculator

The following information is provided to help you understand what 401k is, how is differs from other retirement plans and how to use the 401k Retirement calculator. Please remember the 401k Retirement Calculator is provided as a financial tool to support you with your financial planning, it does not provide or replace investment advice. Due to variances in funds we make no guarantees as to the accuracy of the retirement funds illustrated, they are for guidance only, you should always seek professional advice and guidance for all of your financial plans, particularly when making substantial investments over prolonged periods.

What is 401k?

401(k) is a retirement plan that allows you to invest in your retirement fund without paying income tax for the duration of the agreement. 401k is commonly referred to as a tax free savings plan though in reality, the tax is only deferred until a later date. Specifically, tax is paid on your 401k retirement fund when you start to draw money from it. This approach of tax free investment is superb for those who can afford to invest a substantial amount of their income for use in later life (during g retirement).

What are the benefits of 401k?

The obvious benefit of 401k lays with tax avoidance. By deferring your tax payments to later years, you can save significant amounts of your income which would otherwise be paid in Federal or State taxes. Lets look at an example, (purely for illustration), a single individual living in California earns $250k per annum [ $250,000 illustration here ] meaning they pay $62,630.25 in Federal tax per year and $20,343.24 in State Tax.

 $250,000.00 Tax Calculation for 2016 Tax Year: The following tax calculation provides and overview of Federal and State Tax payments for an individual with no children and no special circumstances. You can produce a bespoke calculation which includes your family situation, your (and their) personal circumstances and the State that you live in by using Tax Form Calculator [updated for 2016 tax year ] with 2016 Tax tables and 2016 Refundable and non-refundable tax credits.

The same individual invests $100k into their 401k Retirement fund (remember, this is just an illustration, restrictions do apply), this would result in their earnings now being $150k ($250k - $100k = $150k), this tax calculation for $150k per annum in California means they pay $32,152.75 in Federal tax per year and $11,043.24 in State Tax, almost $30k less in taxes.

 $150,000.00 Tax Calculation for 2016 Tax Year: The following tax calculation provides and overview of Federal and State Tax payments for an individual with no children and no special circumstances. You can produce a bespoke calculation which includes your family situation, your (and their) personal circumstances and the State that you live in by using Tax Form Calculator [updated for 2016 tax year ] with 2016 Tax tables and 2016 Refundable and non-refundable tax credits.

What other Retirement Plans can I invest in?

There are a number of alternate retirement plans, we have online retirement calculators complete with information of each, simply click on one of the options below.

What will my 401k Retirement fund be worth in the future when compared to inflation?

The effect of inflation is a key factor for your 401k Retirement fund. We suggest using the Retirement Fund - Inflation Effect Calculator

Using the 401k Calculator

The 401k Retirement Calculator uses a number of financial terms, some of which you may already be familiar with. For clarity, we have listed each of the financial terms used on the 401k Calculator below:

  • Current Value of Fund: The value of the fund today, or the opening balance at the start of the plan. Adjust this value to increase/decrease the current value of your retirement fund.
  • Your Annual Contribution: this is the amount you will be paying into the fund per year. Adjust the value to reflect your regular payments on an annual basis (so, if you contribute $200.00 per month, enter $4,800 [12 x 200 = 4800] )
  • Employer's Annual Contribution: this is the amount your employer will be paying into your fund per year. Adjust this figure using the same payment frequency and calculation as mentioned above
  • Years to Maturity: the length of time left till the end of the plan
  • Annual Interest Rate: the interest rate specified for the plan
  • Final Fund Amount: - the total amount in the fund at the end of the plan
  • Interest Rate on Balance: the interest rate of the account that holds the fund
  • Payout Years: the time the fund is expected to last. Adjust this to change the number of years that you would like your 401k retirement fund to last you.
  • Income Tax Rate: the rate of income tax to be charged when withdrawals from the fund are made. You can use the Tax form calculator to gauge the amount of income tax you are likely to pay, simply enter the income amount (annual income) and the tax calculator will provide a calculated percentage (balanced tax percentage across the tax brackets), this is useful for understanding what money you will actually receive after income tax has been deducted from your 401k retirement fund.
  • Annual Payout: the amount calculated per year based on the number of years left, before tax
  • Tax Due on Annual Amount: the income tax amount payable on the amount withdrawn from the fund
  • Net Amount after Tax Deduction: the amount after income tax has been deducted from the annual payout figure

401k - The key points

So, we really just covered the basics of 401k but eh 401k calculator provides a useful tool for you to understand how things could look financially in later life. For more information about 401k, we suggest you start at the IRS website [opens in a new tab]

As a quick recap, here are the key things to remember about 401k

  1. Both you and your employer can pay into your 401k retirement fund
  2. 401k is a tax deferred retirement plan so you don't pay tax on the investments you make
  3. You pay tax on the amounts that you withdraw from the fund during your retirement.
  4. Tax is charged at the income tax rate on 401k when you draw funds.

If you have any comments about the 401k Retirment Calculator or you would like to add to the information provided, please leave a comment below.