Why the employer match is free money
A 401(k) is a workplace retirement account. Many employers will match a portion of what you contribute — for example, 50% of your contributions up to 6% of your salary. If you don't contribute enough to get the full match, you're literally turning down free money that would compound for decades.
The chart shows two lines: the green line includes your employer's match, the navy line is your money alone. The gap between them is the match, grown at your expected rate of return — often a six-figure difference over a career.
Get the most from your 401(k)
- Always capture the full match first. It's an instant 50–100% return on those dollars.
- Increase contributions over time. Bump your percentage by 1% each year or with every raise.
- Mind the fees. Choose low-cost index funds inside your plan where available.
- Don't cash out when changing jobs. Roll it over to keep it growing tax-deferred.
Plan your bigger picture
Open an IRA
An IRA can complement your 401(k) and give you more investment choices.
Compare providers →Talk to an advisor
A fiduciary advisor can help you balance 401(k), IRA, and other goals.
Find an advisor →Frequently asked questions
What does "50% match up to 6%" mean?
If you contribute 6% of your salary, your employer adds another 3% (half of 6%). Contributing more than 6% won't increase the match, but still grows your savings.
Are there contribution limits?
Yes — the IRS sets an annual 401(k) contribution limit that changes each year. This calculator doesn't cap your input, so check the current limit when planning large contributions.
Related tools
Want to know if it's enough? Use the retirement calculator to turn your balance into projected income, or the FIRE calculator to find your independence number.