1. What is the 401k Future Value Calculator?

This calculator estimates the future value of your 401k contributions based on your annual contributions, expected rate of return, and number of years invested.

2. How Does the Calculator Work?

The calculator uses the future value formula:

Where:

• \( Contributions \) — Annual contribution amount in dollars
• \( Rate \) — Expected annual rate of return (as decimal)
• \( Years \) — Number of years contributions will grow

Explanation: The formula calculates compound growth of your contributions over time.

3. Importance of Future Value Calculation

Details: Understanding potential growth helps with retirement planning and setting contribution goals.

4. Using the Calculator

Tips: Enter annual contributions in dollars, expected rate as decimal (5% = 0.05), and number of years. All values must be positive.

5. Frequently Asked Questions (FAQ)

Q1: Should I include employer matching?
A: Yes, include both your contributions and any employer matching in the contribution amount.

Q2: What's a realistic rate of return?
A: Historically, 7% (0.07) is common for long-term stock market returns, but conservative estimates may use 4-5%.

Q3: Does this account for inflation?
A: No, this shows nominal future value. For real value, subtract expected inflation from your rate.

Q4: Can I calculate monthly contributions?
A: This calculator assumes annual contributions. For monthly, multiply contributions by 12 and divide rate by 12.

Q5: What if my contributions increase over time?
A: This assumes constant contributions. For increasing contributions, more complex calculations are needed.