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Become eligible
Your employer's plan establishes eligibility and participation requirements.
401k Calculator & Guide
A 401(k) connects your paycheck, retirement contributions, employer contributions and investments in one workplace retirement plan. Here's how the process works from contribution to retirement.
A 401(k) is a defined contribution retirement plan. If you are eligible under your employer's plan, you can generally elect to have part of your compensation contributed to your individual account.
The process is straightforward: you contribute → your employer may contribute → the money is invested → the account value changes over time → distributions are made according to applicable rules.
Unlike a traditional pension that promises a specified benefit, a defined contribution plan does not promise a specific retirement balance. The eventual account value depends on contributions, investment performance and fees.
Read: What Is a 401(k)? →From your paycheck to your retirement account, these are the main parts of the process.
Your employer's plan establishes eligibility and participation requirements.
You generally choose how much of your pay to defer into the plan, subject to applicable rules.
Your employer may provide matching or other contributions under the plan's terms.
Contributions can be invested among the options offered by your particular plan.
Distributions are governed by the plan and applicable retirement and tax rules.
Employee contributions are generally made through payroll, so your retirement savings can happen automatically each pay period.
You generally choose a percentage or, where permitted, a dollar amount to be deducted from your paycheck and contributed to the plan.
The contribution is deposited into your retirement account and can then be invested according to the options available through your plan.
Employer contributions depend on your specific plan. Matching contributions are generally based on the employee's contributions and the plan's matching formula.
Some employers match part of what employees contribute, according to a formula specified by the plan.
Employer match guide →A plan may also provide employer contributions that are not directly based on the employee's deferral.
Employer contributions →Your own contributions are immediately vested. Employer contributions can have separate vesting rules depending on the plan.
Learn about vesting →Contributions are generally invested using the options provided by your retirement plan. Your account value can rise or fall based on investment performance.
Learn about the funds and other investment choices that may be available in a workplace retirement plan.
Explore investment options →Understand how index funds work and where they can fit within a plan's investment menu.
Learn about index funds →See how target-date funds are designed around an expected retirement timeframe.
Explore target-date funds →Learn why diversification is commonly considered when constructing an investment portfolio.
Learn about diversification →Investment expenses can affect the amount that remains in your account over time.
Understand expense ratios →Learn what portfolio rebalancing means and how it relates to the investments available in your plan.
Explore rebalancing →Tax treatment depends on whether contributions are traditional, Roth or another type permitted by the plan.
Traditional elective deferrals are generally made before federal income tax is applied to the deferred amount. Taxes generally apply when taxable distributions are made.
Designated Roth contributions are included in taxable income when contributed. Qualified distributions can generally receive tax-free treatment.
Vesting determines when you have a nonforfeitable right to employer-provided contributions.
A retirement account can have investment and administrative expenses. Understanding the costs in your plan can help you read your retirement statements more effectively.
Learn about fees associated with administering and operating a workplace retirement plan.
Explore plan fees →Investment expenses can vary between the options available inside a plan.
Investment fee guide →Review the broader 401(k) fees and costs cluster.
View fee resources →Leaving an employer does not automatically mean your 401(k) disappears. Your options depend on your plan and circumstances.
Check your current balance, vested employer contributions, investments and plan information.
Depending on the circumstances, options can include leaving the money in the former employer's plan, rolling it to another eligible retirement plan or taking a distribution.
Direct and indirect rollovers have different procedures and tax considerations.
Explore 401(k) rollovers →Taking money out can have tax consequences and may be subject to additional rules depending on the type and timing of the distribution.
Explore 401(k) withdrawals →Explore different 401(k) scenarios with our calculator collection.
Estimate a future 401(k) balance using contributions, employer matching and growth assumptions.
Calculate →Estimate employer matching contributions based on your salary and contribution rate.
Calculate match →See how contributions and investment growth could affect a projected account balance.
Calculate growth →Go deeper into contributions, Roth accounts, investing, rollovers, retirement and other 401(k) topics.
Use the 401(k) calculator to explore contributions, employer matching, investment growth and estimated future balances.
Educational Disclaimer: 401k.blog provides general educational information about 401(k) plans and retirement planning. This content is not individualized financial, investment, tax or legal advice. Plan features, eligibility, contribution rules, vesting, investment options, fees and distribution provisions can vary. Review your plan documents and consult a qualified professional for advice regarding your individual circumstances.
Clear guides, useful calculators and practical retirement resources to help you understand your 401(k), contributions, employer matching, Roth options, rollovers and long-term savings.
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