How it works
A 401(k) projection has three moving parts, and they are not equally trustworthy. This calculator models all three: the money you defer, the money your employer adds on top, and the investment growth that both earn over time. The part people get wrong is the match. Employers do not match a percentage of your salary — they match a percentage of *your* contribution, and only on the slice of salary up to a stated limit. The engine implements exactly that: it takes the smaller of your contribution rate and the match limit, applies it to the salary, and then applies the employer's match percentage. On the defaults — an $85,000 salary, a 10% deferral, and a 50% match up to 6% — the smaller of 10 and 6 is 6, so the employer contributes $85,000 × 6% × 50% = $2,550 a year, or $212.50 a month. Raising your own rate from 10% to 15% changes that number by nothing whatsoever, because the match is already dead at the 6% ceiling. That ceiling is the single most useful fact on this page. Below the ceiling the match is a straight one-to-two subsidy: every dollar you defer up to 6% of salary pulls in fifty cents from the employer. That is a 50% instant return on that slice, earned before the market moves at all, which is why capturing the full match normally ranks ahead of every other use of a marginal dollar once a small emergency fund exists. Above the ceiling your marginal dollar earns only the market's return, like any other investment you could make. Two structural details decide how much to trust the ending balance. First, contributions are modelled as an ordinary annuity — the combined monthly amount is added at the end of each month, so a month's contribution earns nothing during the month it is made. Second, salary is frozen for the whole projection. Every real raise lifts both your deferral and the matched slice, so the engine's output is a floor rather than a forecast. What the model deliberately leaves out is the IRS dollar ceiling, and that gap matters at the top of the income range. The engine works purely in percentages of salary. At $85,000 a 10% deferral is $8,500, comfortably under the 2026 elective-deferral limit of $24,500, with an additional $8,000 of catch-up available to savers aged 50 or over, and total employee-plus-employer additions capped at $72,000 IRS 2026 limits. But the percentage model silently breaks for a high earner: a $300,000 salary at 10% computes $30,000 of deferrals, which the tax code does not permit. There is also no age input, so catch-up contributions never appear. If either applies to you, read the projection as a ceiling you will bump into rather than a target you will hit. The results split the ending balance four ways so you can see which force did the work. On the defaults the arithmetic is $212,500 of your own money, $63,750 of employer money, and the $40,000 you started with — $316,250 paid in — against $658,707.75 of investment growth. Growth alone is more than twice everything contributed, and that ratio improves the earlier you begin.
Formula
Your deferral = salary x contribution% / 100
Matched slice = min(contribution%, matchLimit%) <-- the cap
Employer contribution = salary x matched slice x match% / 10000
Monthly addition = (your deferral + employer contribution) / 12
Projected balance = FV(balance, return%, years, monthly addition, 12)
ordinary annuity: contributions land at month END
Growth = projected - opening balance - your total - employer total
Worked example - $85,000, 10%, 50% match up to 6%, $40,000, 25y, 7%
Your deferral = 85,000 x 10% = $8,500 / yr
Matched slice = min(10, 6) = 6%
Employer = 85,000 x 6% x 50% = $2,550 / yr
Monthly addition = (8,500 + 2,550) / 12 = $920.83
Projected balance = $974,957.75
you over 25y = 8,500 x 25 = $212,500
employer over 25y = 2,550 x 25 = $63,750
opening balance = $40,000
growth = 974,957.75 - 316,250 = $658,707.75
What stopping below the match limit costs - one extra point of salary
5% deferral: employer = 85,000 x 5% x 50% = $2,125 -> balance $659,367.32
6% deferral: employer = 85,000 x 6% x 50% = $2,550 -> balance $745,437.43
The extra $850/yr of your own money buys $425/yr of match (a 50% return)
and $86,070.11 more at retirement.
Tips
- Contribute at least the match limit. Because the employer applies min(your %, limit %), 6% and 10% draw exactly the same $2,550 — everything you defer above the ceiling is unmatched.
- If you are 50 or older, add the 2026 catch-up of $8,000 on top of the $24,500 deferral limit yourself. There is no age input, so the calculator will never show it.
- Check the dollar ceiling before trusting a large percentage. A $300,000 salary at 10% models $30,000 of deferrals against a $24,500 legal limit, so the projection is only valid while the percentage stays under the cap.
- Elective deferrals still pay Social Security and Medicare tax — only income tax is deferred. Your true take-home cost of the $8,500 is therefore smaller than the deferral figure suggests.
- Treat the balance as a floor. Salary is held flat and no raise, bonus, catch-up or employer profit-sharing is modelled, so real-world contributions almost always exceed this plan.
Frequently asked questions
- How is the employer match actually calculated?
- As a percentage of what you contribute, capped by a percentage of salary. The engine takes min(your contribution rate, the match limit), applies that to your salary, then applies the employer's match rate. On the defaults min(10, 6) = 6, so the employer adds 85,000 x 6% x 50% = $2,550 a year. That is $212.50 a month, added alongside your own $708.33.
- Why doesn't contributing 15% instead of 10% increase my match?
- Because the match is capped at 6% of salary here. Once your own rate reaches the limit, the employer's contribution is fixed — min(15, 6) is still 6. Your extra deferrals above the ceiling earn only the market return, so the marginal 4% is an ordinary investment decision, not a match decision.
- Does the calculator apply the IRS contribution limits?
- No, and that is the model's main blind spot. It works in percentages of salary, so it will happily project a deferral above the legal maximum. For 2026 the elective-deferral limit is $24,500, catch-up for age 50 and over is $8,000, and total employee-plus-employer additions are capped at $72,000.
- What return should I assume for the projection?
- The 7% default is a conventional planning figure for a diversified stock-heavy portfolio and is roughly a real, inflation-adjusted return; the long-run nominal average for US equities has been closer to 10%. The engine does not adjust for inflation, so the ending balance is in nominal dollars — a lower rate is the more cautious choice.
- Is the projected balance in today's dollars?
- No. The engine compounds your nominal balance at the nominal rate you enter and never deflates the result, so $974,957.75 at the defaults is a future-dollar figure. At 2.5% inflation over 25 years, its purchasing power is roughly half that — about $527,000 in today's money.
- Does the employer match count against my own contribution limit?
- No. The $24,500 elective-deferral limit applies only to your own salary deferrals. Employer money is a separate bucket, and the two together are constrained by the $72,000 annual additions limit for 2026 — a ceiling a typical 50% match on 6% will never approach.
- Should I contribute at least enough to get the full match?
- Almost always. Below the match limit each dollar you defer pulls in fifty cents — a guaranteed 50% return before any market movement, and the only such return available in investing. Capturing the full match normally comes ahead of every other financial priority after a small emergency fund and any high-interest debt.