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401K Calculator-Calculate What? Why use one?

by Fern LaRocca CFP®

in 401K,401k Contribution Limits,401k Contribution Limits,401k limits,401K Maximum

I am not a big fan of 401K calculators because people freak out when they see how much they need to meet their goals and most of the time they are not very accurate. Let’s face it. We live in a world that is changing rapidly and what tax rates and goals and rates of returns that seem reasonable now may be totally off the mark next year.

That said. I do believe in using them to get a general over view of producing some kind of goal in mind. Remember that saying- people don’t plan to fail— they fail to plan. And I have over 25 years experience watching clients who have some inkling of what they need to meet their goal turn successful while others are shooting at targets in the dark. That’s the difference between people having a maximum 401k balance or those who don’t.

There are lots of free calculators by Fidelity, Schwab, Vanguard. I like the one at . Just be aware that whatever amount you come up with to meet your goal will change so don’t take those numbers too seriously.