401(k) Future Value

If you are invested in a BlackRock LifePath index fund and are closer to retirement, use 5% to 6%. If you are younger and earlier in your career, use 7% to 8%. The BlackRock LifePath index funds are more aggressive when you are younger and become more conservative as you age.

Yes. The SMarT Automatic Escalation section allows you to enter a percent increase per year, stopping at a certain percentage. This allows you to see the difference additional contributions can make your account balance by the time you retire. You can time your auto increase to coincide with your annual raise by entering your employment start date in Empower.

To determine this, you must make an assumption about how long you and your spouse will live. Use your best guess about your longevity based on your current health and the longevity of family members. But don’t plan on dying too early—generally, you can plan on 25–35 years in retirement.

Use the Investment Distribution Calculator to determine how much you can take each year and not run out during your projected length of life. Annual return should be 4–5% for a more conservative portfolio during retirement. Years of distribution will be your expected life in retirement. You should include a 3% Expected annual inflation rate, which will allow your yearly distributions to increase each year to account for inflation. This amount represents the actual amount you can spend in the first year of retirement.

Please note: Investment Distribution Calculator amounts are not in today’s dollars.

Once you have added up all your monthly income sources for retirement that are in future dollars including pensions and 401(k) distributions, use a Present Value Calculator to see what those future dollar amounts would be in today’s dollars. Social Security estimates and rental income are generally already in today’s dollars and would increase over time with yearly inflation. Add all your income sources once they are all in today’s dollars to evaluate if you would have enough to pay your bills today.

Although the future value of your portfolio may seem like plenty of money, you need to account for inflation. With inflation at 3%, costs will double in 24 years. If you have 24 years until you retire and plan to live about that long in retirement, costs will double and then double again.