Three engines build the balance — and one does most of the work
Run the default profile — 32 years old, $45,000 already saved, $90,000 salary, contributing 10% with a 50%-up-to-6% employer match, 7% return, 3% raises — and the projection lands at about $2.44 million at 65. Decompose it and the hierarchy is striking: the saver’s own paycheck deferrals total $495,701 over 33 years, the employer adds $148,710, and investment growth contributes $1.75 million — roughly 72% of the ending balance.
That decomposition is the strategy. Contributions are the seed, but time invested is the fertilizer, and the early dollars matter disproportionately because they compound longest. It is also why cashing out a 401(k) when changing jobs is so expensive: a mid-career withdrawal doesn’t just remove dollars, it removes decades from those dollars.
The match is the best return you will ever get
An employer match is a 50% (or 100%) first-year return handed out for participating. On the default salary, contributing at least 6% collects $2,700 of employer money in year one, and the amount rises with every raise. Contribute only 3% and the match halves to $1,350 — and the projection shows what the combination costs over a career: the balance at 65 falls from $1.82 million (contributing exactly to the 6% cap) to $1.12 million, a $700,000 gap built from the smaller paycheck deferrals, the forfeited match, and 33 years of compounding on both.
The order of operations for most savers is therefore: contribute to the match cap before anything else, then raise the rate as the budget allows. Between the 6%-cap plan and the 10% default plan lies another $620,000 of projected balance — about $155,000 at retirement for every extra percentage point of salary contributed, on these assumptions.
Reading the projection honestly
The year-by-year table applies your return to the opening balance plus half of each year’s contributions — a standard approximation for money arriving through the year. Reality will be lumpier: 7% is a long-run average that arrives as +20% years and −15% years, and the sequence matters more as the balance grows. Salary growth compounds quietly too; at 3% raises, the $90,000 salary is about $233,000 by the final working year, which is why later-career contribution dollars look so large in the table.
What the model deliberately omits: IRS deferral limits and catch-up amounts (they change yearly — check irs.gov if you contribute aggressively), plan fees (subtract them from your return assumption), employer vesting schedules, loans, and the traditional-versus-Roth tax question, which deserves its own decision and has a dedicated guide on this site.
From balance to retirement income
A projected balance only matters as the income it can produce. The 4% heuristic shown with the results translates the default projection into roughly $97,592 of first-year withdrawals. That is a sanity check, not a plan: it ignores Social Security, taxes on withdrawals, and your actual expenses. To test whether the projected balance funds yourlifestyle — inflated to retirement age and drawn down over your actual horizon — run the US retirement readiness workflow with this calculator’s output as the starting corpus.
Frequently asked questions
How much will my 401(k) be worth at retirement?
It depends on contribution rate, match, return, and above all time. The default profile here — a 32-year-old with $45,000 saved, earning $90,000, contributing 10% with a 50%-up-to-6% match at a 7% return — projects about $2.44 million at 65. Of that, only $495,701 is the saver’s own money; growth contributes $1.75 million.
How does a 401(k) employer match work?
A common design is "50% of what you contribute, up to 6% of salary" — the default here. On a $90,000 salary, contributing at least 6% earns the full $2,700 a year of employer money in year one, rising with salary. It is a guaranteed 50% first-year return on those dollars, before any market growth.
What happens if I contribute below the match cap?
You permanently forfeit free money. Cutting the default contribution to 3% halves the match to $1,350 in year one, and the projected balance falls from $1.82 million (at 6%) to $1.12 million — the widening gap is both the missing dollars and their decades of lost compounding. Whatever else your budget does, contributing to the match cap is the priority.
Does this calculator enforce IRS contribution limits?
No — deliberately. Annual employee deferral limits and age-50 catch-up amounts change from year to year, so the model applies your chosen percentage without a cap and leaves the current figures to irs.gov. High earners with high contribution rates should check whether the modeled contribution exceeds the current limit.
What annual return should I assume?
The 7% default reflects a diversified, equity-heavy portfolio’s long-run expectation, not a promise — and not a smooth path. Fees come straight out of return, so a fund charging 1% more costs you exactly 1% of compounding per year. If your plan’s funds are expensive, model a lower return and consider the cheapest broad-index options available.
What is the 4% rule shown under the projection?
A rough sustainability heuristic: withdrawing 4% of the starting balance in the first retirement year (then adjusting for inflation) has historically survived most 30-year retirements. On the projected $2.44 million, that is about $97,592 a year. Treat it as a sanity check, not a plan — the retirement readiness workflow models the withdrawal phase properly.