The only guaranteed 50% return you'll ever be offered
Most personal finance advice involves trade-offs and uncertainty. The employer 401(k) match doesn't. If your company matches 50% of contributions up to 6% of salary, then contributing that 6% earns you an instant 50% return on those dollars, before the market does anything at all.
No investment available to ordinary people comes close to that. And yet a large share of employees contribute below the match threshold — quietly declining part of their own compensation every payday. That's why this calculator checks it first and tells you in plain language if it's happening to you.
How the projection is built
Each year the calculator does four things:
- Works out your contribution: salary × your percentage
- Works out the employer match: salary × min(your %, match limit) × match rate
- Grows the existing balance by the expected return, and grows the year's contributions by half of it (since they arrive throughout the year, not on day one)
- Increases your salary by the raise percentage for next year
The three levers that decide your number
- Contribution rate. Going from 6% to 10% of a $75,000 salary is $250 a month — and typically hundreds of thousands of dollars over a career.
- Time. Contributions made in your twenties do most of the heavy lifting, because they compound the longest. Ten years of delay can halve the outcome.
- Fees. Not in the calculator, but real: a 1% annual fund fee is roughly a 1% cut off your return every single year. Check your plan's low-cost index options.
Priority order that actually works: 1) contribute enough to get the full employer match, 2) clear high-interest debt like credit cards — see the payoff calculator, 3) build an emergency fund, 4) then increase retirement contributions further. The match comes first because nothing else pays 50% guaranteed.
A word on what this can't know
This is a projection built on steady assumptions: a constant return, a constant raise, uninterrupted contributions. Real careers include job changes, market crashes, pauses and bonuses. The value here isn't predicting your exact balance — it's showing you how much the levers you control actually move the outcome.
Once you have a target balance in mind, the retirement withdrawal calculator answers the follow-up question: will that pot actually last once you stop working?
Frequently asked questions
How does an employer 401(k) match work?
A common formula is '50% up to 6%': for every dollar you contribute, your employer adds 50 cents, but only on contributions up to 6% of your salary. On a $75,000 salary, contributing 6% ($4,500) earns you $2,250 of employer money. Contributing less than 6% leaves part of that behind permanently.
How much should I contribute to my 401(k)?
At an absolute minimum, contribute enough to capture the full employer match — that is an immediate guaranteed return no investment can beat. Beyond that, a widely used target is 15% of gross income including the match, adjusted for how early you started and when you want to retire.
What return should I assume?
Something conservative and clearly labelled as an assumption. Long-run US stock market averages have been around 7% a year after inflation, but any individual decade can be much better or much worse. Run the calculator at 5%, 7% and 9% to see the range instead of trusting one number.
Why does the projection show a lower 'today's money' figure?
Because inflation reduces what a dollar buys. A projected $1.5 million in 30 years might have the buying power of roughly $600,000 today at 3% inflation. Planning on the nominal number alone overstates how comfortable that retirement will feel.
What happens to my 401(k) if I change jobs?
Your own contributions are always yours. Employer contributions may be subject to a vesting schedule, meaning you earn full ownership over several years. When you leave you can typically leave the money in the old plan, roll it into the new employer's plan, or roll it into an IRA — rolling over usually preserves tax advantages, while cashing out triggers taxes and penalties.