Salary - Enter your current annual salary or annual
wages here. If you are married
enter the sum of both of your salaries.
Contribution Percentage - Enter a percentage between
1% and 15% that represents the percentage of your income that you wish
to withold into your 401(k) account. The witholding may not exceed 15%.
Also, a person cannot contribute more than $9,500 to a 401(k) account in
any year, so adjust this percentage to make sure that the total
annual witholding does not exceed $9,500. If you are married, you
can both save up to $9,500 for a potential total of $19,000.
Match Percentage - If your company matches your
contributions, enter the matching percentage it uses (for example,
if your company matches 3% of your salary, enter 3 here). If your company
does not match, enter zero.
Pre-retirement Interest Rate - Enter the interest rate you expect to
earn on your 401(k) account prior to retirement. To give you two ideas, current CD
rates run between 5% and 6%, while
the stock market has returned an average of 10% or so for many years. For
6%, enter 6 in the entry field. Typically you would invest more agressively
prior to retirement and then move the money to less-risky investments after
Post-retirement Interest Rate - Enter the interest rate you expect to
earn once you retire. See the previous field for an explanation. You might enter 10 in the previous field and 6 here, for example.
Inflation Rate - Enter the expected inflation rate during
the coming years. 4% is a good average number for the past ten years and would
work well here. If you are more pessimistic, choose a higher number.
Salary Increase Rate - Presumably your salary will
rise over the years. It should, at a minimum, rise with the inflation rate
in the form of cost-of-living increases. It may rise faster than that depending
on the job you hold. Enter the rate at which you expect your salary or wages to
increase. If you are unsure, enter the inflation rate from the previous field
Current 401(k) Value - Enter the current value of any 401(k)
accounts you have now.
Current Age - Enter your current age.
Expected Retirement Age - Enter the age at which you plan to
retire. 65 is normal, but you might want to consider early retirement options.
Desired Retirement Income - Enter the amount of money you
would like to have to spend each year during retirement, in today's dollars.
For example, if you look at yourself and say, "If I were to retire today, I would feel comfortable
if I had $30,000 per year to spend" then enter $30,000 here. Remember that you will have to pay taxes on that amount just like you do today, so take
that fact into account. A good ballpark
figure recommended by many financial experts is 80% of what you currently make per year. Therefore if your salary is $30,000 now and you feel comfortable with that
amount, you could enter $30,000 * 80% = $24,000 in this field.
Click the calculate button to see your retirement outlook
401(k) Contribution - This field shows how much money you
are contributing to your 401(k) account per year given the contribution percentage
you entered above. If this value exceeds $9,500, adjust the percentage you entered.
Matching Contribution - This field shows how much money your
employer is contributing to your 401(k) account based on the matching percentage
you entered above.
401(k) Account Value at Retirement - This will be the total value of your
401(k) account when you retire.
1 year value - This is the total value of your
401(k) account at the end of your first year in retirement.
2 year value - This is the total value of your
401(k) account after two years in retirement.
3 year value - And so on...
4 year value
5 year value
10 year value
15 year value
20 year value
30 year value
40 year value