401K Contribution Difference Calculator
401(k) Contribution Difference Calculator
This calculator shows the difference over 1-year and 5-years' time of contributing to your 401(k) plan
instead of putting the same after-tax amount from your paycheck into an account bearing the same return.
Enter amounts in white cells (examples are in blue font). Results are in grey.
Your salary 50000
Your tax bracket 25%
Contribution percentage* 10%
Employer matching percentage (if any) 5%
Capital gains tax rate 15%
Investment growth rate 8%
(*) Contribution percentage refers to the percent of your paycheck that you would contribute to your 401(k)
and assumes the equivalent savings/investment account, if not contributing to a 401(k)
1-year savings 5-year savings
No 401k contribution $4,590 $24,933
With 401k contribution $9,350 $50,250
$ Difference $4,760 $25,316
Portion of difference from smaller tax base salary $1,250 $6,250
(%) 26.3% 24.7%
Portion of difference from not having to pay capital gains $810 $4,400
(%) 17.0% 17.4%
Portion of difference from growth in employer contributions $2,700 $14,667
(%) 56.7% 57.9%
Notes:
This calculator assumes no (0%) salary growth over the periods in question.
The marginal income taxrate at which 401(k) withdrawals would ultimately be taxed is also ignored.
Five-year savings rate assumes uninterrupted growth for 5 years and annual contribution of same amount each year.
Capital gains taxes for the 5-year period are calculated once at the end of 5 years.
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401K Contribution Difference Calculator XLS
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