How Much Will My 401k Grow If I Stop Contributing?

People earn to have a better lifestyle and a comfortable future. By livable future, we mean comfortable old age. When you retire, you do not work and hence have no income. Your life depends upon the money you have saved during your young period. You keep this money so that you do not have to struggle when you are old and retired. 

A way of saving funds for retirement is 401k. Read this article to learn what 401k is, how you can contribute and invest in it, how it grows, and what happens if you stop contributing to your 401k.


Introduction to 401k 

401k is a kind of pension account for your retirement. It is an account that is created at the time you get employed. Your employer will put some money from your salary towards this account, and your employer will add some.  The employer’s contribution is a percentage of the amount contributed by you. 

Types of 401k Plans

There are two types of 401k plans, classified based on taxation.

  • Roth 401k Plan: in this plan, your funds are taxed when they are added to your 401k account. When you finally withdraw funds from your retirement plan, it will be yours, and no tax will be charged.
  • Traditional 401k Plan: Opposite to the Roth plan, in a standard 401k plan, your funds are taxed at the time of withdrawal. 

The employee or the 401k plan holder must decide which plan they want. It generally depends on the tax bracket you expect after you retire. The Roth plan would benefit the higher tax bracket, while the traditional method is best suitable for the lower tax bracket. 

Where To Invest Your 401k Funds?

Employers generally give their employees options on how they want to invest their 401k funds. The investment helps in reducing the risk of the loss of these funds. The standard options that employees get for the acquisition of funds are :

  • Target-Date Funds- Target funds involve a mixed ratio of safe and risky investments depending on your retirement time. Your investment will be safer if you are not far from your retirement. However, the investment will be more difficult if there is a long time left to your retirement. 
  • Mutual Funds- Mutual Funds are pooled funds of investors, which are invested in different securities like shares and bonds, forming a portfolio. You can invest your 401k funds in a percentage of this portfolio.

The Growth of 401k

 There are a few factors that determine the growth of your 401k funds. These are:

  1. Time left for your retirement.
  2. Your age.
  3. Type of assets in which your 401k funds are invested.

All these above factors are the prime factors in the growth of your 401k funds. Let’s look at how these factors affect your retirement funds. 

For example, starting your 401k plan in your mid-20s means you have more than 30 years for your retirement, and you can take risks with your investment. With higher risks comes higher returns. However, the risk of losing is also implied. Stocks are a better option for long-term investment. With enough time until your retirement, you will still have enough time to regain the retirement funds if anything goes wrong with your investment.

However, it is advisable not to take risks if you are near your retirement, for example, 5 to 8 years. If you lose your funds, you will not have enough time to retrieve them. The risk-free investment will increase rather slowly, but it will not decrease. 

The risky investment portfolios have a larger ratio of stocks than bonds. As retirement approaches, your fund’s manager will adjust your investment by reducing stocks and adding more bonds. 

There is another way of increasing the value of your 401k funds faster, that is, by compounding. Many investors use this strategy to earn higher interest. Compounding means making interest on interest. For compounding your 401k funds, you can reinvest any gains on your investments, like dividends or price appreciation. This will increase the investment as well as the income from it. Hence, the growth of your 401k funds.

How much will my 401k grow if I stop contributing?

If you stop contributing, your 401K will grow only if you leave it in your current retirement account or transfer it to a new one. However, If you withdraw your funds, they can not grow, and you may delay your retirement.

Additionally, you can protect your 401K using Gold IRA.

If you stop contributing to your 401k account, it will likely continue to grow, but at a slower rate, due to the absence of additional contributions.

The amount your 401k will grow will depend on several variables, including the investment options you have chosen, the overall performance of the markets, and any fees or expenses associated with your account. Additionally, the longer you keep your money invested, the more time it has to grow, although it is important to keep in mind that past performance is not a guarantee of future results.

If you would like to estimate the growth of your 401k, you can use an online retirement savings calculator. However, it’s important to remember that these estimates are just that – estimates – and that your actual results may differ. In my opinion, calculators can make mistakes from 10% to 30% in estimation. To help ensure the growth of your 401k, it’s a good idea to regularly review your investment options and make changes as needed to align with your goals and risk tolerance.


Can you stop 401k contributions?

Yes, you can stop the 401K contribution, and your 401K will continue to grow as long as you leave it in your current retirement account or transfer it to a new retirement account. However, If you withdraw your funds, they can not grow, and you may delay your retirement.

Generally, the contribution to 401k funds stops after employees stop working for the company managing their funds. If you are not working with them, it is implied that no contribution will be made to that account. However, it does not mean that your funds will not grow as long as they remain in the account.

If you want to start a new 401k plan with your new employer, let the last remain as it is. However, you can only leave the funds in your old 401k account if they are equivalent to or above $5,000. Otherwise, your previous employer will transfer it to your new account or pay it through a check. You can also transfer the funds from the 401k account with your last employer to your new employer. 

In either case, your funds should remain in your retirement account to grow. If you withdraw your funds and do not put them towards another retirement plan, there will be no growth; hence, you will have no funds for your requirements. Your funds will grow depending on the type of your 401k account, portfolio investment, or savings account. Funds in savings accounts grow as per the interest rate, while in portfolio investment, they grow as per the market. 

Points To Remember 

One must remember a few points when they stop contributing to their 401k plan or transfer it to a new account.

  • No funds in your retirement account mean no growth of the funds. Therefore, instead of withdrawing the funds, put them on another retirement plan.
  • When transferring the funds to a new 401k account, process it through automatic transfer and not by withdrawing. This will help you save on taxes.
  • Many companies have restrictions on the annual contribution of funds to 401k plans. Automatic transfers will help you avoid such restrictions.

Books To Read on 401k Investment.

Your company is doing its part by managing your 401k funds. By learning more about it, you can also work towards growing your 401k funds. The following is a list of books to help you create a successful 401k plan.

  • ‘How Much Money Do I Need? Uncommon Financial Planning Wisdom for a Stress-Free Retirement by Todd Tressider

You may know how you can grow your funds, but many find themselves in a situation where they don’t know how much money they should add to their funds. This book will help you clear that confusion. 

  • IRAs, 401(k)s and Other Retirement Plans: Strategies for Taking Your Money Out.

This book helps you manage your 401k funds after starting your retirement plans. It lets you know how to withdraw your funds or access them. 

  • Retirement Plan For Dummies

If you have no idea how to plan your retirement funds, this book could be a great start to gaining some knowledge. You will learn about many resources through which you can prepare a successful retirement plan. 

  • ‘Five Years Before You Retire, Updated Edition: Retirement Planning When You Need it The Most’ by Emily Guy Birken

There is nothing like running ‘out of time.’ You can always prepare a retirement plan, even if you are just five years behind at the beginning of your retirement. This book helps you formulate a better 401k plan with less time and money. 

When do I have to stop contributing to my 401k?

It would help if you stopped contributing to your 401k when you stopped working. You will be able to continue stashing cash in an individual retirement account after you, as a worker, turn age 70½ based on a provision in the Secure Act.

Generally, you can start taking withdrawals from your IRA, SEP-IRA, SIMPLE IRA, or retirement plan account when you reach age 72 (70 ½ if you go 70 ½ before January 1, 2020).


No contribution to your 401k plan does not mean it will not grow. The growth will be persistent as long as funds are in your account. The choice is yours if you transfer your funds to your new employer or let it stay with your previous employer.

You must make sure about your 401k plan a few things. Like investing your funds according to the time remaining for retirement, types of investments in your portfolio, and not withdrawing the 401k funds. Start a 401k plan, give it some years, and you can comfortably retire. 

You can protect your retirement fund if you invest in IRA precious metals. For example, investors with Gold IRAs can hold physical metals such as bullion or coins. Get a free pdf about Gold IRA.





Igor has been a trader since 2007. Currently, Igor works for several prop trading companies. He is an expert in financial niche, long-term trading, and weekly technical levels. The primary field of Igor's research is the application of machine learning in algorithmic trading. Education: Computer Engineering and Ph.D. in machine learning. Igor regularly publishes trading-related videos on the Fxigor Youtube channel. To contact Igor write on:

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