401(k) Growth Calculator
The employer match is the part worth paying attention to. It is an immediate return on your own contribution that no investment can match, and contributing below the match limit leaves it on the table.
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Take the whole match, first
A fifty percent match is an instant fifty percent return on the matched portion, before the market does anything at all. Nothing else in personal finance offers that reliably. If you contribute less than the match limit, you are declining part of your compensation.
Set your contribution below the match limit and watch the employer figure fall. That difference is money you were offered and did not take.
Vesting decides whether it is yours
Employer contributions often vest over several years, either gradually or all at once on a cliff. Leaving before you vest can mean forfeiting some or all of what your employer put in. It is worth knowing your schedule, particularly if you are considering a move.
Contribution limits
The IRS caps annual employee contributions, with an additional catch-up allowance from age fifty. The cap is adjusted most years, so check the current figure rather than relying on a number you remember. Employer contributions sit under a separate, higher combined limit.
Traditional or Roth
Many plans offer both. Traditional contributions reduce taxable income now and are taxed on withdrawal; Roth contributions are taxed now and withdrawn tax-free. The choice hinges on whether you expect a higher or lower tax rate in retirement, and splitting between the two is a defensible hedge when you genuinely do not know.
Frequently asked questions
What does a 50% match up to 6% mean?
Your employer adds fifty cents for every dollar you contribute, but only on contributions up to six percent of your salary. Contributing six percent gets the full match; contributing more is fine but earns no additional match.
How much should I put in my 401(k)?
At minimum enough to capture the full match. Beyond that, a frequently cited target is fifteen percent of income towards retirement in total, counting the employer contribution.
What happens to my 401(k) if I change jobs?
Your own contributions are always yours. Employer contributions depend on vesting. You can usually leave the balance, roll it into a new employer plan, or roll it into an IRA.
Are employer contributions counted in the annual limit?
Not in the employee deferral limit, but there is a separate, higher combined cap covering employee and employer contributions together.