How much should I contribute to my 401(k)?
Start with the number that captures your entire employer match — it's the only guaranteed return in investing, and contributing a percent or two below it is the most common and most expensive mistake in personal finance. Enter your salary, your current rate, and your employer's match formula to see the match you're capturing, the exact percent that captures all of it, the dollars you're leaving behind each year, and where the whole thing lands by retirement. Everything runs in your browser — nothing is uploaded.
A simplified projection, not financial or tax advice. It uses the 2026 employee contribution limit of $24,500 ($8,000 extra contribution at age 50+), applied to your own contributions only — the employer match doesn't count toward that limit. It assumes a steady salary, a constant return, contributions and match paid level through the year, and no waiting period for the employer match to become yours. Actual limits, match rules, and match ownership rules vary by plan.
How employer 401(k) matching works
Most 401(k) plans match a portion of what you contribute, up to a cap expressed as a percent of your pay. A very common formula is "100% of the first 3%, then 50% of the next 2%." That means if you contribute at least 5% of your salary, your employer adds 4% of your salary on top — a guaranteed, immediate return you can't get anywhere else. Contribute less than 5% and you forfeit part of that 4%, permanently.
Why the match is "free money"
A dollar-for-dollar match is an instant 100% return on your contribution before the market does anything. Even a 50% match is a 50% return. No investment reliably offers that. Passing it up to free up a little take-home pay is almost always a losing trade — which is why "at least contribute enough to get the full match" is the single most repeated piece of retirement advice.
A worked example: what 1% short actually costs
The defaults on this page — a $90,000 salary, contributing 4%, and the classic "100% of the first 3%, then 50% of the next 2%" match:
- You contribute $3,600. The match is 3% at 100% plus 1% at 50% = 3.5% of pay, or $3,150.
- The maximum this formula pays is 4% of pay — $3,600 — and it needs a 5% contribution to unlock.
- So contributing 4% instead of 5% forfeits $450 a year, permanently, in exchange for keeping about $17 more per bi-weekly paycheck before tax.
- Left to compound at 7% for 30 years, that $450 a year would have become roughly $42,500.
The percentage that matters is the sum of every tier's cap — 3% + 2% = 5% here. Contributing anything below it leaves guaranteed money behind; contributing above it earns no extra match, though it is still worth doing for the tax treatment.
2026 contribution limits
| 2026 limit | Amount |
|---|---|
| Your contributions (under 50) | $24,500 |
| Catch-up, age 50–59 and 64+ | +$8,000 → $32,500 |
| Catch-up, ages 60–63 | +$11,250 → $35,750 |
| You + employer combined | $72,000 |
| Salary counted for plan purposes | $360,000 |
The employer match doesn't count toward your own limit — it falls under the combined $72,000 cap instead, which most people never approach. This calculator caps your contribution at the applicable limit so a high percentage on a high salary doesn't overstate what you can actually put in.
Two limits with sharp edges: the $360,000 compensation cap means salary above it is invisible to the plan, so a percentage-based match stops growing there. And if you're 50 or over and your prior-year wages from that employer exceeded $145,000 (indexed), SECURE 2.0 requires your catch-up contributions to go to the Roth side.
The match rules that quietly cost people money
- Vesting. Your own contributions are always 100% yours. The employer's share may not be. Cliff vesting gives you nothing until a set date (up to 3 years) and then everything; graded vesting hands it over in slices over up to 6 years. Safe-harbor matches are immediately fully vested. Leaving a month before a cliff date can forfeit several years of match.
- The true-up. Most plans match per pay period, not per year. Max out your contributions by August and there are no contributions left in the last four months for the plan to match — so you lose that portion of the match unless your plan has a "true-up" provision that reconciles at year end. If it doesn't, spread contributions across all 26 pay periods.
- Auto-escalation. Many plans raise your contribution rate automatically each year. That is usually good — but check what rate it stops at, because plan defaults often top out well below what you need.
- After-tax contributions. Some plans allow non-Roth after-tax contributions above the $24,500 limit, up to the $72,000 combined cap, and permit converting them to Roth. Where offered, this "mega backdoor Roth" is the single largest tax-free savings opportunity available to an employee.
- Bonuses. Whether your contribution percentage applies to bonus pay varies by plan, and a bonus that skips the deferral can cost you match.
Each of these turns on how your plan words its formula rather than on the arithmetic. Our guide to how to calculate your 401(k) employer match works through the common tiered, dollar-capped and percentage-of-pay formulas so you can read your own summary plan description and know what the match is actually worth.
How much should you contribute?
A workable order of priorities, highest guaranteed return first:
- 1. Contribute enough to capture the entire match. A 100% match is an immediate doubling; nothing else on this list competes.
- 2. Clear high-interest debt. Paying off a card at 22% is a guaranteed 22% return, better than any market expectation.
- 3. Build an emergency fund so the next surprise doesn't undo step 2.
- 4. Fund an HSA if you're eligible — the only account that is deductible going in, tax-free growing, and tax-free coming out for medical costs.
- 5. Then push the 401(k) toward the annual maximum, or use an IRA first if your plan's fund menu is expensive.
As a target rate, the common rule of thumb is 15% of gross pay including the match — so a 4% employer match means aiming for 11% of your own. Starting later means a higher number, not a different rule.
Frequently asked questions
How much should I contribute to my 401(k)?
At an absolute minimum, whatever percentage captures your full employer match — below that you're declining guaranteed money. Beyond that, the widely used target is 15% of gross pay including the match, so a 4% match means roughly 11% of your own. Between the two, clearing high-interest debt and building an emergency fund generally beat extra 401(k) contributions.
What contribution percent do I need for the full match?
Enough to cover every tier of your match formula. With "100% of the first 3% plus 50% of the next 2%," the match caps out once you contribute 5% of your salary. This calculator shows the exact percent that captures your full match and flags how much you're currently missing.
Does the employer match count toward the $24,500 limit?
No. The 2026 employee contribution limit of $24,500 (plus an $8,000 extra contribution at 50+) applies only to the money you contribute. Employer matching and profit-sharing fall under a separate, much higher combined limit, so the match never eats into your own contribution room.
When does the employer match become yours?
It depends on your plan's vesting schedule. Cliff vesting gives you none of the match until a set date — up to three years — then all of it at once. Graded vesting hands it over in slices over as long as six years. Safe-harbor matches are yours immediately, and your own contributions always are. This tool assumes the match vests right away; check your summary plan description, because leaving shortly before a cliff date can forfeit years of match.
What happens if I max out my 401(k) early in the year?
If your plan matches per pay period and has no "true-up" provision, hitting the annual limit in August means there are no contributions left in September to December for the plan to match — so you forfeit that portion of the match. Plans with a true-up reconcile at year end and pay it anyway. Check which yours does before front-loading; if it doesn't true up, spread contributions evenly across every pay period.
Should I choose a Roth or traditional 401(k)?
Traditional contributions lower your taxable income now and are taxed on withdrawal; Roth contributions are made after tax and come out tax-free later. The employer match is always pre-tax regardless. The right choice depends on whether you expect a higher or lower tax rate in retirement — Planomy's full app can model both.
Find out what your contribution rate buys
Capturing the match is step one. The question underneath it is whether your rate gets you to a retirement you'd actually accept. Planomy takes this contribution and projects the whole thing — taxes, Social Security, spending, and a retirement date you can move — so you can test 5% against 11% and see the difference in years. Free, private, and running in your browser.