How to Use a 401k Calculator
A 401k calculator allows you to see how much your account balance will increase over time. The resulting number can be displayed in a variety of ways, including the Growth Chart, Estimated Future Account Totals, and even a table that lists the estimated percentage of increase each year. As you change the values of your inputs, the results will change accordingly. The calculator also takes into account expected annual increases in pay and the frequency of employer payments.
Once you’ve selected the amount of contribution you plan to make each year, you can enter your assumptions. In general, you’ll want to input your annual salary percentage and the number of years you expect to work until retirement. Providing these figures will help you determine the amount of money you will need to save in order to reach your desired amount. You can also enter the percent of employer contributions that your employer will match. Using the calculator, you can quickly determine how much you’ll need to pay out of pocket when you retire.
The next step is to input the amount of money you’d like to withdraw each month. This is a crucial step in calculating how much money you want to save each month for retirement. You can set the payment amount as a percentage of your salary. If you’re paying 3% of your salary, your employer will contribute $150. It’s important to keep in mind that your employer may make additional contributions, which will change your total contribution amount.