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401k Savings Calculator - Greater Texas
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401(k) Calculator

A 401(k) can be one of your best tools for creating a secure retirement. It provides you with two important advantages. First, all contributions and earnings to your 401(k) are tax-deferred. You only pay taxes on contributions and earnings when the money is withdrawn. Second, many employers provide matching contributions to your 401(k) account. The combined result is a retirement savings plan you cannot afford to pass up.
By changing any value in the following form fields, calculated values are immediately provided for displayed output values. Click the view report button to see all of your results.



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401k Savings Calculator - Greater Texas › Greater Texas Credit Union
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**FIG_GRAPHTITLE** Column Graph: Please use the calculator's report to see detailed calculation results in tabular form.

Definitions

Percent to contribute

This is the percentage of your annual salary you contribute to your 401(k) plan each year. Your annual 401(k) contribution is subject to maximum limits established by the IRS. The annual maximum for 2024 is $23,000. If you are age 50 or over, a 'catch-up' provision allows you to contribute an additional $7,500 into your account. The SECURE 2.0 Act of 2022 increases the catch-up contribution beginning in 2025 for individuals age 60 to 63 to 50% of the standard contribution limit. Beginning in 2026 catch-up contributions must be made as Roth contributions for individuals making more than $145,000 (adjusted for inflation) in the previous year. The current calculator does not include the future catch-up contribution limit or Roth requirement which are subject to pending IRS rule finalization and clarification. Employer contributions do not count toward the IRS annual contribution limit.

Employees classified as "Highly Compensated" may be subject to additional limits based on their employer's overall 401(k) participation. If you expect your salary to be $155,000 or more in 2024 or was $150,000 or more in 2023, you may need to contact your employer to see if these additional contribution limits apply to you.

Annual salary

This is your annual salary from your employer, before taxes and other benefit deductions. Since your contribution and employer match are based on the salary paid to you by your employer, do not include any income you may receive from sources other than your employer.

Current age

Your current age.

Age at retirement

Age at which you plan to retire. This calculator assumes that the year you retire, you do not make any contributions to your 401(k). For example, if you retire at age 65, your last contribution occurs when you are actually 64.

Current 401(k) balance

The starting balance or current amount you have invested or saved in your 401(k).

Annual rate of return

The annual rate of return for your 401(k) account. This calculator assumes that your return is compounded annually and your deposits are made monthly. The actual rate of return is largely dependent on the types of investments you select. The Standard & Poor's 500® (S&P 500®) for the 10 years ending December 31st 2023, had an annual compounded rate of return of 15.2%, including reinvestment of dividends. From January 1, 1970 to December 31st 2023, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.9% (source: www.spglobal.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a financial institution may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.

It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that investment funds and/or investment companies may charge.

Annual salary increase

The annual percentage you expect your salary to increase. The calculator assumes that your salary will continue to increase at this rate until you retire.

Employer match

The percentage of your annual 401(k) contributions your employer will match. These contributions are often capped. Please read the definition for "Employer maximum" for more information. Also note employer contributions do not count toward the IRS annual contribution limit.

Matching contributions can also be subject to a vesting schedule. See your plan information for details.

Employer maximum

This is the maximum percent of your salary matched by your employer, regardless of the amount you decide to contribute.

For example, let's assume your employer provides a 50% match on the first 6% of your annual salary that you contribute to your 401(k). If you have an annual salary of $100,000 and contribute 6%, your contribution will be $6,000 and your employer's 50% match will be $3,000 ($6,000 x 50%), for a total of $9,000. If you only contribute 3%, your contribution will be $3,000 and your employer's 50% match will be $1,500, for a total of $4,500.

If you increase your contribution to 10%, you will contribute $10,000. Your employer's 50% match is limited to the first 6% of your salary then limits your employer's contribution to $3,000 on a $100,000 salary. The total 401(k) contribution from you and your employer would therefore be $13,000.



Information and interactive calculators are made available to you only as self-help tools for your independent use and are not intended to provide investment or tax advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.