How does the employer match in this calculator work?

Exactly as most plan formulas are written: the employer adds a percentage of your own contribution, but only on the portion of your salary up to the match cap. Contributing 8 percent with a 50 percent match capped at 6 percent of salary earns a match of 50 percent of 6 percent of salary — 3 percent of salary in total.

Why are contributions credited at year end?

To keep the yearly model simple and slightly conservative. In a real plan, contributions arrive each paycheck and begin growing sooner, so a real balance at the same steady return would end a little higher than this projection. The page states the convention openly so you can judge the difference.

Does this projection include taxes or contribution limits?

No. It projects the account balance before tax, with no yearly contribution limit, vesting schedule or fees applied. Plan rules and tax law change and vary by employer, so check your own plan documents for the limits and vesting that apply to you.

401(k) Calculator — Balance With Employer Match

How a 401(k) actually grows

A 401(k) grows from three sources, and this calculator keeps them separate because they behave very differently. The first is your own contributions, taken from each paycheck as a percentage of salary you choose. The second is the employer match — extra money your employer adds, usually described in a formula such as matching 50% of what you contribute, on contributions up to a set percentage of your salary. The third is investment growth on everything already in the account. Early in a career the contributions dominate and growth is a small extra; late in a long projection the relationship flips, and growth on the accumulated balance becomes the largest of the three. The breakdown above the calculator shows your own mix at your own numbers, and the year-by-year table shows the flip happening.

Two plan features are deliberately simplified here so the model stays readable. Contributions are credited at year end in this projection — in a real plan they arrive each paycheck and start growing sooner, so this page is, if anything, slightly conservative. And the return is a single steady rate, while real investment returns arrive unevenly. For the wider retirement picture — spending, other accounts and how long savings last — pair this page with the Retirement Calculator and the Investment Calculator.

The model, year by year

Salary in year y = Salary × (1 + raise)^{y − 1}
Your contribution = Salary_y × contribution %
Match = Salary_y × min(contribution %, match cap) × match %
New balance = Old balance × (1 + return) + your contribution + match

Read the match line carefully: the employer matches a percentage of your contribution, but only on the slice of salary up to the match cap. Contributing beyond the cap is still worthwhile for your own saving, but it earns no further match. Contributions are credited at year end in this model, after the year's growth on the existing balance.

The match is part of your pay

The most expensive mistake in a 401(k) is contributing less than the match cap. If your employer matches 50% of your contribution on the first 6% of salary, then contributing only 3% gives up a match worth 1.5% of your salary every single year — an immediate, guaranteed return on the extra contributions that no investment decision can reliably beat. In the default example, a $70,000 salary with an 8% contribution captures the full match: 50% of the first 6% of salary, worth $2,100 in year one alone, growing with every raise after that. The statistics panel flags whether your contribution rate reaches your cap; if it does not, raising it to the cap is almost always the first move, before any debate about funds or returns.

Worked example with the defaults

Start with a $20,000 balance and a $70,000 salary, contribute 8%, with an employer matching 50% of your contribution on at most 6% of salary, 2% yearly raises, a 7% return and 25 years to run. In year one you contribute $5,600 and the match adds $2,100; by the final year, raises have lifted the salary past $110,000, so the same percentages contribute far more in dollars. Across the whole projection your contributions and the match together come to roughly a quarter of a million dollars — and the projected balance finishes far above that sum, because growth on a balance that has been building for two and a half decades becomes the single largest contributor. The exact figures from your own inputs are in the results and the year-by-year table; change the return by a single point and watch how much of the ending balance was growth all along.

Raises, returns and the long game

Because contributions are a percentage of salary, raises compound your saving as well as your balance: a 2% yearly raise means the dollar amount you contribute grows every year without you ever changing a setting. That is also why increasing your contribution rate by one point in a raise year is painless — your take-home pay still rises. The return assumption deserves the opposite treatment: be a little pessimistic. A plan that works at 6% and delights at 7% is sturdier than one that only works at 8%, and the table makes it cheap to test all three before you commit to a number.

Worked example

On the defaults — $20,000 saved, a $70,000 salary, 8% contributed, a 50% match on the first 6% of salary, 2% raises and a 7% return — the year-one match alone is $2,100, and over 25 years growth becomes the largest single part of the projected balance, ahead of everything you and your employer pay in.

How to use this calculator

Enter your current 401(k) balance and your annual salary.
Enter the percentage of salary you contribute — check your pay stub or plan site if you are unsure.
Enter your employer's match exactly as your plan states it: the percentage of your contribution they add, and the salary cap they match up to.
Add your expected yearly raise and a realistic long-term return, then set the years to project — usually the years until you plan to retire.
Check the flag in the statistics: if you are contributing below the match cap, raising your rate to the cap is the highest-value change you can test.

Limits, taxes and what this projection leaves out

Workplace plans operate under rules that change over time and differ by employer and country; US 401(k) plans, for example, have yearly contribution limits set by the IRS, possible catch-up contributions at older ages, and vesting schedules that can mean part of the employer match is only fully yours after some years of service. Taxes are the other large omission: traditional 401(k) contributions usually reduce today's taxable pay and are taxed on withdrawal, while Roth contributions are taxed today and withdrawn tax-free, so two equal projected balances are not necessarily equal in retirement spending power. None of that is modelled here — this page projects the account balance under the stated model, in nominal dollars, before tax.

Using the projection well

Treat the output as a range, not a promise. Run it once at your expected return, once two points lower, and once with a contribution rate one or two points higher; the spread between those three runs tells you more than any single figure. If the low run still funds your plans, your saving rate is doing the heavy lifting and market luck matters less. If only the high run works, the honest levers are the ones on this page: contribute at least to the full match, raise the rate with each raise, and give the plan as many years as you can.

401(k) Calculator

Year by year