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401k Calculator – How Much Can I Save?

Learn How Much You Should Be Saving Towards Your Future.

How much should you be saving for your retirement? What will your savings be worth when you retire? If you put away a little more each pay period, how big of an impact will that have down the road? What will happen if you withdraw some of your retirement savings early?

If you’re thinking about your retirement, these are big questions. Fortunately, they all have answers in straightforward dollars and cents. Use the Ubiquity Retirement + Savings™ 401k calculator to get the hard numbers about your retirement savings. Whether you have a 401k through your employer or a solo 401k for your self-employed/sole-proprietor business, get the facts on how your savings add up.

How much will your 401k be worth?

We all have ideas for how we’d like to spend our retirement. Whether you hope to travel the world, buy an RV, or just spend more time with your family, the choices you make today will dictate the options available to you when you retire.

Fortunately, you don’t have to fly blind. Use Ubiquity’s 401k calculator to get a clear picture of how your savings will stack up when you retire and how much you should be saving now to realize your goals.

Using Ubiquity’s 401k calculator

The Ubiquity 401k calculator paints a picture of what your retirement savings will look like when you’re ready to stop working. Start by entering your age, household income, and any current savings.

Enter the amount you currently save towards your 401k each month, the amount you expect to spend each month when you retire, and the age you plan to retire. Then, Ubiquity’s 401k calculator will show you what to expect, and if there is a deficit. Unlike other 401k calculators, you might find online, the Ubiquity 401k calculator also accounts for hidden fees associated with your retirement savings that you may not be aware of.

You will see:

  • The monthly income you can expect to need when you retire
  • The amount you will actually receive from your retirement based on your current savings and monthly contributions
  • How close you are to achieving your retirement goals—whether you’re on the right track, ahead of the game, or need to beef up your savings

401k contribution calculator

The Ubiquity 401k calculator includes a contribution calculator. By plugging in different numbers, you can see:

  • How your retirement savings are likely to grow if you continue contributing to your 401k at your current contribution rate
  • How much more savings you will have (and what that will mean for your monthly retirement income) if you increase your contributions
  • Whether or not your current contribution level will allow you to reach your targeted savings goals for retirement
  • How much more you should contribute to reach your retirement goals if your current contributions will fall short

401k withdrawal calculator

The Ubiquity 401k calculator also includes a tool to show you the impact of withdrawing funds from your retirement savings. Enter your age, the amount you’re planning to withdraw, and your state and federal income tax rate, and you can see what a withdrawal will mean for your retirement.

Make sure you understand: if you take an “early withdrawal” from your 401k before you retire, you can face stiff penalties—as well as potentially sacrificing significant value from those savings down the road.

Should I take an early 401k withdrawal?

Money can get tight and emergencies happen. When you’ve built up a nest egg for yourself in a 401k, It can be tempting to want to dip into those savings. In most cases, however, you should exhaust every other option before you do. Why?

401k penalties

If you’re younger than 59½, you’ll pay an additional tax penalty of 10% of the funds you withdraw. That’s a big penalty. If you withdraw $20,000 from your 401k, for example, you will immediately lose $2,000 in tax penalties.
Note: the 10% penalty can be waived if you become permanently unable to work due to disability. There are also some variations on this rule for people who leave their employer after age 55 or who work in the public sector. Most people taking an early withdrawal from their 401k, however, can expect to sacrifice 10% of the funds they withdraw this penalty. Not to mention missing out on the compound interest you would have if you would have left that money alone.

401k taxes

Remember, the contributions you make to your 401k plan come out of your paycheck before you pay taxes on that income. In fact, that tax savings is one of the major benefits of using a 401k. When you take a withdrawal, however, those funds count as income for the current year. You will have to pay any federal and state income tax on those funds the same as you would for any other income.

Lost employer contributions

If your 401k is provided by your employer, and your employer contributes to your retirement savings, you may lose some of those funds if you make an early withdrawal. Some employers use “vesting schedules” for contributions they make for their employees. Basically, even though the employer contribution shows up in your account, you don’t actually “own” those funds—and you can’t use them or take them with you to a new job—until you’ve worked a certain amount of time for your employer.

Say you’ve contributed $5,000 to your 401k, and your employer matched that contribution, contributing an additional $5,000 to your retirement savings. Your 401k account balance may show $10,000. If you’re only 30% vested, however, you only own 30% of that employer contribution—$1,500. So, the real total you can access is just $6,500. If you take an early withdrawal, in addition to taxes and penalties, you also lose the portion of your retirement savings that isn’t vested (in the case of this example, $3,500).

Lost growth

The biggest reason to avoid taking an early withdrawal from your 401k is that by withdrawing money now, you are losing out on all of the interest that money would earn if you left it in your 401k until you retired. As a very basic example, if you had $5,000 in your 401k today, and it grew at an average rate of 5% per year, it would be worth $10,441 in 20 years—more than double. If you withdraw those funds early, however, you’re not only facing a stiff tax penalty, you’re losing all of that additional growth.

What percentage of my income should I contribute to my 401k?

You can use the 401k calculator to get straightforward, dollars-and-cents answers to many important questions about your retirement. When it comes to how much you ought to be saving, however, things aren’t quite so simple. It depends on your age, how many years you plan to work and, ultimately, on the kind of lifestyle you want to have after you retire.

Some advisors recommend saving 10-15% of your income as a general rule of thumb. If you save that much from the time you first start working in your 20s until you retire, that may be fine. If you’re starting your retirement savings later in life, however, you will want to save more than that to try to catch up. While there are few hard and fast rules on exactly how much you should save, here are some general guidelines:

  • Save as much as you can afford: In general, the more you can save, the more financial security (and freedom) you’ll have when you retire. It’s never a bad idea to put away as much from your pay as you can reasonably afford, up to the maximum for your 401k. For 2018, you can contribute up to $18,500 to your 401k, plus up to $6,000 in catch-up contributions if you’re 50 or older.
  • Maximize employer contributions: If your employer matches your 401k contributions, you should take full advantage of it. That means, at a minimum, you should contribute up to the maximum your employer will match.
  • The later you start, the more you should save: If you started saving for your retirement in your 20s, you already have a solid base that will continue to grow throughout your working years. If you’re in your 40s or 50s, however, and are just getting started, you will want to try to catch up. Save as much as you can without having to dip into emergency savings or add debt.

Questions? Ask our experts by phone or email.

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© 2018 Ubiquity Retirement + Savings
1160 Battery Street, Suite 350, San Francisco, CA 94111 / Support: 855.401.4357

© 2018 Ubiquity Retirement + Savings
1160 Battery Street, Suite 350, San Francisco, CA 94111 / Support: 855.401.4357