PENSION savers can use 401k growth calculators to check how much money they’ll have for retirement.
It’s a key way to understand whether you’ll have enough cash as you get older – or whether you need to ramp up your savings habits.
A 401k allows you to dedicate a percentage of your pre-tax salary to a retirement account.
Employers can also choose to match some or all of the contributions, but this isn’t mandatory so you’re not guaranteed the boost.
Most employees can currently put in $19,500 a year of their own money in a 401k account, while workers above 50 can get an extra $6,500.
There are two basic types of 401ks – traditional and Roth – with the main difference being how they’re taxed.
In a traditional 401k, employee contributions reduce their income taxes for the year they are made, but they’ll pay tax when they withdraw cash.
With a Roth, employees make contributions with post-tax income but can make withdrawals tax-free.
Best 401k growth calculators
Plenty of investment and retirement firms as well as comparison sites have free 401k growth calculators online.
Below we’ve rounded up some of our favourite ones, based on how easy and clear they are to use.
If you use one of them, make sure to double-check the assumptions and keep in mind that investment returns are never guaranteed.
How long your savings will last depends on how much you’ve saved, monthly spending, other sources of income and tax rates.
Fishers Investments
The tool by Fishers Investments asks for details including years until retirement, your 401k value, current salary and estimated return.
You also add in how much you contribute to your 401k plan, and how much your employer contributes, if anything.
Put in the requested data and the tool then shows a chart illustrating how your savings will increase in value over time, giving you a good overview.
How to boost your retirement savings
DON’T know where to start? Here are some tips on how to get going.
- Understand where you start:Before you consider your plans for tomorrow, you’ll need to understand where you stand today. Look into your current pension savings and research when you’ll be eligible for social security benefits, if at all.
- Take advantage of a 401k: The 401k plans are tax-effective accounts that put you in a better place financially for your retirement. If you save, your employer may too.
- Take advantage of online planning tools: Financial provider Western & Southern Financial Group and comparison site Bankrate have tools that give you an idea of what your retirement income will be based on how much you’re saving.
- Find out if your workplace offers advice: Some employers offer sessions with financial advisers to help you plan for your future retirement.
AARP
This tool by AARP, an interest group for over-50s, is similar to Fishers Investments.
On top of the details asked by the latter, it also lets you choose how long your employer matches the contributions.
At the bottom, you can then see the difference if you get employer contributions or not.
If you click on “view report”, you’ll get a chart showing how your money will increase in value over time.
Fidelity
Fidelity’s 401k growth calculator lets you calculate how much money you’ll end up with if you increase your contributions over time.
It could be handy if you’re worried about retirement, or whether you’re keen to contribute more but don’t know how much you’ll benefit.
If you’re starting in the beginning of your career, you’ll likely see a huge boost thanks to the benefit of compound interest.
You can select the investment return yourself, which naturally isn’t guaranteed, but it’s a good way to compare how it changes the final pot.