Breakdown
How it works
Your contributions, the employer match and investment growth compound over your career. The match is an instant return of 50–100% on the matched portion — always contribute at least enough to capture it. Contributions are capped by the IRS each year; the employer match does not count toward your cap.
Formula
Worked example
Age 30 to 65, $80,000 salary growing 3%, 8% contribution, 50% match on 6%, 7% return, $25,000 start: about $2.0 million at 65 — roughly $82,000 a year at a 4% withdrawal.
Frequently asked questions
What is the 401(k) limit for 2026?
$24,500 employee deferral; $8,000 catch-up at 50+ ($11,250 for ages 60–63). Total including employer contributions: $72,000.
Traditional or Roth 401(k)?
Traditional saves tax now at your marginal rate; Roth is tax-free later. Younger and lower-bracket savers lean Roth; high earners expecting lower retirement tax lean traditional. Splitting is common.
What if I leave my job?
Your contributions are always yours; employer contributions vest on a schedule (immediate to 6 years). Roll over to the new plan or an IRA to avoid tax and the 10% penalty.