Retirement Contribution Rate Calculator

Are you maximizing the value of your employer-sponsored retirement plan? Try using this contribution rate calculator to see the long-term financial impact of small increases in your contribution rates. Consider giving yourself a retirement raise! For more information, contact us.

Note: This calculator is a Java applet and may not be optimized for some versions of browsers developed for the Apple Macintosh operating system.

    You can also get SUN's Java™ Plug-in here: Get the Java™ Plug-in!

    For more information about this Plug-in please visit: SUN's Java™ Plug-in
    For more information about these financial calculators please visit: Financial Calculators from KJE Computer Solutions, LLC


Annual salary

This is your annual salary from your employer before taxes and other benefit deductions. Since your contribution and company match are based on the salary paid to you by your employer, do not include any income you may receive from sources other than your employer.

Percent to contribute

This is the percentage of your annual salary you contribute to your retirement plan each year. Most employers permit employees to contribute up to 15% of their salary to a retirement plan.

Annual contribution limits

Your total contribution for one year is based on your annual salary times the percent you contribute. However, your annual contribution is also subject to certain maximum total contributions per year. The annual maximum for 2010 remains at $16,500. Starting at age 50 or older, a "catch-up" provision allows you to contribute an additional $5,500 into your retirement plan account. It is also important to note that employer contributions do not affect an employee's maximum annual contribution limit.

It is important to note that some employees are subject to another form of contribution limitations. Employees classified as "Highly Compensated" may be subject to contribution limits based on their employer's overall retirement plan participation. If you expect your salary to be $110,000 or more in 2010 or was $110,000 or more in 2009, you may need to contact your employer to see if these additional contribution limits apply to you.

Current age

Your current age.

Age of retirement

Age you wish to retire. This calculator assumes that the year you retire, you do not make any contributions to your retirement plan. So if you retire at age 65, your last contribution happened when you were actually 64.

Current retirement plan balance

The starting balance or current amount you have invested or saved in your retirement plan.

Annual rate of return

The annual rate of return for your retirement plan account. This calculator assumes that your return is compounded annually and your deposits are made monthly. The actual rate of return is largely dependent on the type of investments you select. For example, from December 1999 to December 2009, the average annual compounded rate of return for the S&P 500 was -0.6%, including reinvestment of dividends. From January 1970 to December 2009, the average annual compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 10.1% (source: Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a bank may pay as little as 1% or less but carry significantly lower risk of loss of principal balances.

It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that funds and/or investment companies may charge.

Annual salary increase

The annual percentage you expect your salary to increase. We assume that your salary will continue to increase at this rate until you retire.

Employer match

An employer match is in addition to your annual contributions. It is based on a percentage of your annual contributions. This range can be anywhere from 0% to 100%.

For example, let's assume the employer matches 50% of the employee's contributions up to 6% of their salary. The employee earns $100,000 per year and contributes 10%. The results would be:

  • $10,000 from the employee
  • $3,000 from the employer (which is 50% of $6,000 or 6% of the annual salary)
  • Total: $13,000

Please read the definition for "Employer maximum" for a detailed description of maximum employer matching contributions. It is also important to note employer contributions do not affect the maximum amount allowed to be contributed by an employee.

Employer maximum

This is the maximum percent of your salary matched by your employer regardless of the amount you decide to contribute. For example, let's assume your employer has a 50% match, up to a maximum of 6% of your annual salary. If you have an annual salary of $25,000 and contribute 6%, your annual contribution is $1,500. With a 50% match, your employer will add another $750 to your retirement plan account. If you increase your contribution to 10%, your annual contribution is $2,500 per year. Your employer match, however, is limited to the first 6% of your salary and remains at $750.

Calculator Assumptions

  1. All employer and employee contributions are assumed to happen monthly, with deposits happening at the beginning of the month. The amount of the contributions is the annual amount divided by 12.
  2. All changes to employees' earnings and/or maximum contributions happen on an annual basis. For example, if the employee currently earns $40,000 and expects a 5% percent increase in salary per year, the first year of the calculations will use $40,000 for their annual salary. At the start of the second year, the annual salary will be increased 5% to $42,000. Contributions by the employer and employee are assumed to be constant during the year until the next salary increase occurs. All calculations that use salary will be affected annually by the projected salary increase.
  3. Employer match is limited by a maximum amount. This is the maximum percent of the employee's salary matched by the employer regardless of the amount contributed by the employee. For example, assume the employer has a 50% match up to a maximum of 6% of annual salary. An annual salary of $25,000 and a contribution of 6% produces an annual contribution of $1,500. With a 50% match, the employer will add another $750 to the account. If the contribution is increased to 10%, then annual contribution is $2,500 per year by the employee. The employer match, however, is limited to the first 6% of salary and remains at $750.
  4. The annual rate of return is used to calculate an effective monthly rate of return. The effective monthly rate of return, if compounded monthly, produces the exact annual rate of return entered on the calculator. The effective monthly rate of return is slightly lower than dividing the annual rate of return by 12. This difference allows for monthly compounding without over stating the annual rate.
  5. We assume at retirement occurs when the employee reaches retirement age, contributions are not made during that year. For example, if the current age entered is 30 and the retirement age entered is 65, we assume contributions will be made for each year starting at the beginning of age 30 to the end of age 64, which is exactly 35 years. Contributions and totals end when the employee turns 65.