How much should I have in my 401(k) by 40?

A widely used marker is about three times salary by 40 and ten times by 67, but the contribution rate matters more than hitting any specific milestone.

Does the employer match count towards my 15%?

No. Count only your own contributions towards 15% of gross income; the match is extra.

What return should I assume?

Something defensible — 6-7% before inflation for a stock-heavy mix is a common planning figure, and lower as you approach retirement.

Should I choose Roth or traditional 401(k)?

Roth if you expect a similar or higher tax rate in retirement; traditional if you want the deduction now at a high rate. Many people split.

What happens to my 401(k) if I change jobs?

Leave it, move it to the new plan, or roll it into an IRA. Cashing out triggers income tax and usually a 10% penalty before 59½.

Estimator

What's My 401(k) Worth at Retirement?

What's my 401(k) worth by the time you retire? The balance today matters far less than the contribution rate and the years left, because compounding does most of the work in the final decade.

Your details

Current 401(k) balance$65,000

Annual salary$72,000

Your contribution rate8%

Employer match4%

Years until retirement25

Assumed annual return7%

Projected balance at retirement

$899,255

Paying in $8,640 a year, including the employer match

Growth on today's balance: $352,783
Value of future contributions: $546,472
Employer match over the period: $72,000
Income at a 4% withdrawal rate: $35,970 a year

How you compare: A common planning rule is 15% of gross income into retirement, and roughly 10 times salary saved by the time you stop working.

How we calculate this

Contributions are modelled as a level percentage of today's salary, paid annually and growing at your assumed return. Real salaries usually rise, so this is conservative.

The employer match is added on top of your own rate, which is why raising your rate to the full match threshold is the highest-return move available in this account.

Returns are compounded annually at the rate you choose. Many planners use 6-7% before inflation for a stock-heavy portfolio and less as the mix shifts to bonds.

Retirement income uses a 4% withdrawal rate as a planning yardstick, not a promise. Sequence of returns, fees and taxes all affect what is actually safe.

The employer match is the whole game early on

A dollar-for-dollar match on the first few per cent of salary is an immediate 100% return. No investment available to you competes with it, which is why capturing the full match comes before any other retirement decision.

Check the vesting schedule too. Matched money can require two to four years of service before it is genuinely yours, and leaving early forfeits the unvested part.

Fees quietly change the answer

A one per cent annual fee sounds trivial and is not. Over thirty years it can remove a fifth or more of the final balance compared with a fund charging a few basis points.

Look for broad index funds in the plan menu and check the expense ratio on each. If the plan is expensive, contribute to the match, then use an IRA for the rest.

What the projected balance actually buys

Divide the projected balance by 25 for a rough annual income figure, then remember it will be taxed as ordinary income if the account is traditional rather than Roth.

Social Security sits alongside it. Getting an estimate from your Social Security statement and adding it to the 4% figure gives a far more realistic retirement income picture than the balance alone.

Frequently asked questions

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