401(k) growth,
match included.

Field guide

How a 401(k) actually grows.

A 401(k) builds wealth through three forces working at the same time: your contributions (a slice of every paycheck), your employer’s match (free money the company adds on top, up to a plan limit), and compound growth on the running balance (the market doing its job). Project them across a 30-to-40 year working career and they don't add; they multiply. The chart above shows exactly how the three streams stack year by year.

The math, briefly

For each month of your working life:

Salary increases once per year by your raise rate. Returns compound monthly. Contributions land at month-end (the standard convention). Run that loop for every month between your current age and retirement age, and the final balance is what you’ll have.

The power of employer matching.

If there’s one paragraph in this article worth tattooing on your forearm, this is it: capture your full employer match. It is the single highest-return move available to most American workers — an instant 100% return on every dollar you contribute, before the market does anything. No stock pick, no real-estate hustle, no side gig comes close.

How the typical match works

The most common US plan design is “100% match up to N% of salary”. If your employer matches 100% up to 5%:

• You contribute 5% → employer adds 5%. Total going in: 10% of salary.
• You contribute 3% → employer adds 3% (matched dollar-for-dollar, but only on what you put in). You leave 2% on the table.
• You contribute 10% → employer still only adds 5% (the cap). The extra 5% from you is still great, but isn’t doubled.

The lesson: always contribute at least enough to capture the full match. Anything less is leaving real, unrecoverable money on the table and missing out on the decades of compounded growth that money would have earned.

What “leaving money on the table” actually costs

Picture two coworkers, both 30 years old, earning $75,000, and planning to retire at 65. Both invest in the same funds and earn 7%/year. Their employer matches 5%. They’re identical except for one decision:

• Sarah contributes 5% — the exact amount to capture the full match. Her account grows to roughly $1.04M by retirement.
• Mark contributes 3%, leaving 2% of the match unclaimed. His account grows to roughly $754K.

That’s a $285,000 gap: created by a 2-percentage-point difference in contribution rate. The cost of Mark’s habit isn’t the 2% of paycheck he kept; it’s the entire compounded value of the 2% employer match he refused. Try the numbers in the calculator above and watch the gap appear in real time as you adjust the contribution rate.

How matching designs vary

• 100% match up to N%: the most common. This calculator models this.
• 50% match up to 2N%: same total employer cost, half the match rate but on twice the salary. (E.g. 50% on the first 6%.) For maximum matching, you still need to contribute the full 2N% from your side.
• Tiered match: e.g. 100% on the first 3% and 50% on the next 2%. Captures the full match by contributing 5%.
• Safe-Harbor non-elective: employer contributes a flat ~3% regardless of what you do. Rare but generous. Your contribution % doesn’t affect the employer’s share.
• Discretionary / profit-sharing: varies year to year based on company performance. Treat it as a bonus, not a baseline.

For a precise plan-specific projection, check your company’s Summary Plan Description (SPD). If your plan is a 100%-up-to-N% style, the calculator above models it directly.

The other big lever — time.

Compound growth is exponential, which means each year of participation is worth more than the year before it. The same person who starts contributing at 25 instead of 35 will retire with roughly twice the balance, even if the late-starter contributes more aggressively to catch up. That’s the math — you can verify it by changing the “current age” field on the form and watching the projection.

2026 contribution limits (informational)

• Employee elective deferral limit: $23,500 ($31,000 with the age-50+ catch-up). The IRS updates this annually.
• Combined employer + employee limit: $70,000 ($77,500 with catch-up). Most workers don’t get near this.
• Compensation cap: only the first $345,000 of salary counts for plan-contribution math at high incomes.

If your contribution % times your salary exceeds the employee limit, you’ll be capped automatically by payroll. The calculator does not apply IRS limits . It shows the unconstrained projection so you can see the shape of growth.

Caveats

• Returns are uncertain. A 7% expected return is the long-run historical average for a balanced equity portfolio, not a guarantee. Real returns vary year to year and a 30-year sequence can come in 3–4 percentage points lower or higher than expected.
• Inflation eats nominal balance. A $1.5M nest egg in 2055 buys what about $700K buys today, assuming 2.5% inflation. For inflation-adjusted projections see the Retirement Calculator.
• Taxes apply on withdrawal. Traditional 401(k) balances are taxed as ordinary income when you draw them in retirement; Roth 401(k) balances aren’t. The calculator’s output is a pre-tax balance.
• Vesting schedules. Employer match dollars often vest gradually (e.g. 20% per year of service). If you leave before fully vested, you forfeit the unvested match. The calculator assumes 100% vesting for simplicity.

Disclaimer

This is a planning tool, not financial advice. For individualized retirement planning, consult a fiduciary advisor or your 401(k) plan administrator.