See your 401(k) at retirement, match and all.
Enter your salary, contribution and employer match. Watch how your own money, the free employer match, and decades of tax-deferred compounding stack into your retirement balance, year by year.
Your plan
What your balance is really made of
Your money, the match, and the growth
Balance composition over time
The cost of skipping the match
Retirement scorecard
Year-by-year projection
Assumes your salary grows with your annual raise, so your contribution and the employer match rise each year too.
| Age | Your contribution | Employer match | Growth to date | Balance |
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401(k) investing, explained
How Your 401(k) Grows Over Time
A 401(k) grows through three mechanisms: your contributions, employer matching contributions, and investment returns that compound tax-deferred. An employee contributing 6% of a $75,000 salary with a 50% employer match adds $6,750 per year to their account. At a 7% average annual return, this grows to approximately $680,000 over 30 years, with investment earnings accounting for more than half of the total balance.
The tax-deferred nature of a 401(k) acts as a growth accelerator because you are not losing a portion of your gains to taxes each year. In a taxable brokerage account, capital gains and dividends are taxed annually, which reduces the amount that compounds. In a 401(k), 100% of your gains remain invested and continue generating returns. Over 30 years, this tax deferral alone can result in 25-40% more wealth compared to an identical investment in a taxable account, depending on your tax bracket and the types of investments held.
Understanding Employer Match
An employer match is essentially free money added to your retirement account based on your own contributions. The most common match formula is 50% of your contribution up to 6% of salary, but formulas vary widely between employers. If you earn $75,000 and contribute 6% ($4,500), a 50% match adds $2,250 annually. Not contributing enough to capture the full match is equivalent to declining a guaranteed 50% return on your money.
Some employers use dollar-for-dollar matching up to 3% or 4% of salary, while others use tiered formulas that match different percentages at different contribution levels. A growing number of companies have also introduced automatic enrollment, starting new employees at a default contribution rate (typically 3-6%) with automatic annual increases. If your company offers automatic escalation, opt in, it painlessly increases your savings rate by 1% per year until you reach a target level, and most employees report not noticing the difference in their paychecks after each increase.
401(k) Contribution Limits
The IRS sets annual limits on 401(k) contributions that are adjusted periodically for inflation. For 2024, employees under 50 can contribute up to $23,000, while those aged 50 and older can add an extra $7,500 in catch-up contributions for a total of $30,500. The combined limit including employer contributions is $69,000 ($76,500 for 50+). Contributing the maximum allowed accelerates retirement savings, especially in later career years when earnings tend to be highest.
If you cannot max out your 401(k) immediately, prioritize reaching at least the employer match threshold first, then increase your contribution by 1-2% each year or with each raise. An employee who increases their contribution rate by 1% annually from age 25 reaches the maximum contribution level within a decade while barely feeling the impact on their paycheck. The difference between contributing 6% and 15% of a $75,000 salary over 30 years at 7% returns is approximately $600,000, a life-changing amount that comes from incremental, painless increases rather than a single dramatic cut to your lifestyle.
Traditional vs Roth 401(k)
A traditional 401(k) uses pre-tax contributions that reduce your current taxable income, but all withdrawals in retirement are taxed as ordinary income. A Roth 401(k) uses after-tax contributions, meaning no immediate tax break, but qualified withdrawals in retirement are completely tax-free. If you expect your tax rate to be higher in retirement than it is now, the Roth option often provides greater lifetime value. Many financial planners recommend contributing to both types for tax diversification.
The decision between traditional and Roth depends heavily on your current versus expected future tax rate. Early-career professionals in lower tax brackets often benefit more from Roth contributions because they pay a low tax rate now and avoid higher rates in retirement. High earners in their peak earning years may prefer traditional contributions for the immediate tax deduction. A split strategy, contributing to both traditional and Roth, provides flexibility in retirement to withdraw from whichever account minimizes your tax bill in a given year, a technique known as tax bracket management.
Common questions
How much should I contribute to my 401(k)?
At minimum, contribute enough to get the full employer match, it is free money. Financial advisors generally recommend saving 10%-15% of your income for retirement, including the employer match.
What is the 2024 401(k) contribution limit?
For 2024, the employee contribution limit is $23,000 ($30,500 if you are 50 or older). The total contribution limit including employer match is $69,000 ($76,500 for 50+).
How does employer match work?
A common match is 50% of your contribution up to 6% of salary. If you earn $75,000 and contribute 6% ($4,500), your employer adds 50% of that ($2,250). Not contributing enough to get the full match means leaving free money on the table.
Should I choose traditional or Roth 401(k)?
Traditional 401(k) contributions reduce your taxable income now but are taxed in retirement. Roth contributions are after-tax but grow and withdraw tax-free. If you expect higher taxes in retirement, Roth is often better.
What happens to my 401(k) if I change jobs?
You can roll over your 401(k) to your new employer's plan or to an IRA without tax penalties. Leaving it in your former employer's plan is also an option, but rolling over gives you more investment choices.
Estimates for planning only. Actual results depend on real investment returns, salary changes, contribution limits, plan rules and how long you stay invested. Returns are not guaranteed and balances can fall as well as rise. Verify contribution limits and match terms with your plan before deciding.