See how much free money your employer 401(k) match adds to your retirement savings and how it grows over time.
Real-world scenarios showing how different match formulas, contribution rates, and time horizons change the amount of free money you collect.
Scenario: $75,000 salary, 6% contribution, "100% up to 3% + 50% up to 5%" match, 7% annual return, 30 years.
Scenario: $75,000 salary, 6% contribution, 7% annual return, 30 years — comparing plans side by side.
Scenario: $45,000 salary, age 25, "100% up to 3%" plan, 7% annual return, 40 years until age 65.
Salary = Annual gross salary
Your Rate = Your contribution as a % of salary
Cap = % of salary the employer matches up to (e.g., 3%, 4%, or 6%)
Match Rate = Match per dollar contributed (e.g., 100% = $1.00, 50% = $0.50)
Example: $75,000 salary, 6% contribution, "100% up to 4%" → $75,000 × min(6%, 4%) × 100% = $3,000/year
For the "100% up to 3% + 50% up to 5%" plan: Salary × 3% × 100% + Salary × (your rate between 3% and 5%) × 50%
FV = Future value of the contributions
PMT = Annual contribution amount (your money, the match, or both)
r = Annual return rate as a decimal (e.g., 7% → 0.07)
n = Number of years
If the return rate is 0%, the future value is simply PMT × n (no growth).
A 401(k) match is an employer-paid contribution added to your retirement account based on how much you contribute. For example, a "100% up to 4%" plan adds $1 for every $1 you contribute, up to 4% of your salary. Because the match is money your employer gives you for saving — on top of tax advantages and investment growth — it is often called "free money." Not contributing enough to capture it is one of the most expensive retirement mistakes you can make.
A 401(k) match is an employer contribution that is tied to your own contributions. Instead of paying you more salary, your employer adds money directly into your retirement account — typically a percentage of the salary you contribute. Because the match is not dependent on market performance and requires nothing more than saving your own money, it is effectively an immediate, guaranteed return on the contributions it covers.
The math is simple. Most plans match a percentage of your salary up to a cap. With a "50% up to 6%" plan, for example, your employer adds $0.50 for every $1.00 you contribute, up to 6% of your pay — a maximum match of 3% of your salary. With a "100% up to 4%" plan, you get $1.00 per $1.00 up to 4% of pay, for a maximum match of 4% of your salary. If you contribute less than the cap, you only receive a partial match; if you contribute at or above the cap, you capture the full amount.
The golden rule: always contribute at least enough to get the full match before directing money anywhere else (after building a small emergency fund). A match is a 50–100% instant return — no investment strategy reliably beats that. This calculator shows exactly how much that free money is worth, both today and compounded over your working years.
Vesting determines who owns the money in your 401(k). Your own contributions are always 100% vested — they are yours from the moment they are deposited. Employer match contributions, however, often vest over time to encourage you to stay with the company.
Two common schedules exist. Cliff vesting gives you 100% ownership of the match all at once after a set period, commonly three years — leave one month early and you forfeit all of it. Graded (graduated) vesting gives you ownership gradually, such as 20% per year over five years, so you keep a portion of the match even if you leave before the schedule completes.
Before changing jobs, check your plan's vesting schedule. If you are months away from a cliff-vesting milestone, staying a little longer can lock in thousands of dollars in employer match. The vested portion of your account is always yours to keep and can be rolled over into an IRA or your new employer's plan without penalty.
Match formulas vary widely. Here is how the most common plans compare on a $75,000 salary, assuming you contribute enough to capture the full match.
| Match Plan | How It Works | Max Match (% of Pay) | Max Match on $75,000 | Contribution Needed |
|---|---|---|---|---|
| 100% up to 3% | $1.00 per $1.00 on first 3% | 3.0% | $2,250 | 3% |
| 100% up to 4% | $1.00 per $1.00 on first 4% | 4.0% | $3,000 | 4% |
| 100% up to 5% | $1.00 per $1.00 on first 5% | 5.0% | $3,750 | 5% |
| 50% up to 6% | $0.50 per $1.00 on first 6% | 3.0% | $2,250 | 6% |
| 100% up to 3% + 50% up to 5% | $1.00 on first 3%, $0.50 on next 2% | 4.0% | $3,000 | 5% |
| 50% up to 4% | $0.50 per $1.00 on first 4% | 2.0% | $1,500 | 4% |
Notice that "100% up to 4%" and the "3 + 2" plan both max out at 4% of pay — the difference is how much you must contribute to get there. Plans with higher caps require higher contribution rates, so check the "Contribution Needed" column to make sure your election captures the full match.