401K compound interest calculation

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Number of messages in the thread: 3

1. Date: 2007-01-06 10:12:11
Subject: 401K compound interest calculation
From: S...@g...com Search message by this author

Hi...

Can someone recommend a site, or an excel download that will help me
estimate my 401K growth over time, including an employer match? I
found quite a few, but the problem is they only allow a 100% employee
match, and my employer matches 8% for my 2% of my salary (they're very
generous).. I'd like a calculator that figures in my annual raises,
plus my annual rate of return, etc. Bloomberg has a good one, but it
limits the employer match to 100%... Also, if I have to do a formula
myself, do I perform the compound interest calculation monthly?
quarterly? Any ideas?

Thanks.

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2. Date: 2007-01-06 14:43:02
Subject: Re: 401K compound interest calculation
From: joetaxpayer <j...@n...com> Search message by this author

S...@g...com wrote:

> Hi...
>
> Can someone recommend a site, or an excel download that will help me
> estimate my 401K growth over time, including an employer match? I
> found quite a few, but the problem is they only allow a 100% employee
> match, and my employer matches 8% for my 2% of my salary (they're very
> generous).. I'd like a calculator that figures in my annual raises,
> plus my annual rate of return, etc. Bloomberg has a good one, but it
> limits the employer match to 100%... Also, if I have to do a formula
> myself, do I perform the compound interest calculation monthly?
> quarterly? Any ideas?
>
> Thanks.

I sent Steve a copy of the spreadsheet I have on my personal site. FWIW,
it allows entry for total percent going in, i.e. the sum of the employee
deposit and employer match expressed as one number, for Steve, 10%.
I don't compound monthly, we always talk here in terms of annual rate of
return, and a 40 or so line sheet is easier to glance at in terms of
changes to salary or impact due to a raise of the percent saved.
Calculators that skip the 40 years' numbers and only show an end result
are useless to my way of thinking, it's better to see the amount saved
each year to tell if you're on track. For example - Given the numbers
15% total saving, 3% annual raise, 8% return, one has 20X after about 42
years of work, but only 5X after 21. The full sheet shows the power of
compounding in the last decade. Happy to forward or post a downloadable
copy.

JOE