The three levers, ranked by power
Every 401(k) projection comes down to three inputs you control. They are not equally powerful:
- Time. Nothing else comes close. At 7% growth, money doubles roughly every 10 years, so a dollar contributed at 25 becomes ~4x a dollar contributed at 45. Starting matters more than optimizing.
- Contribution rate. Fully in your control and linear-plus: each extra 1% of salary adds surprisingly large amounts once compounding works on it — use the "1% more" line above to see your own number.
- Return. Mostly determined by your stock/bond mix and fees, not fund-picking skill. The controllable part is cost: a 1% expense-ratio difference compounds into a six-figure difference over a career.
Never skip the match
A typical plan matches 50% of contributions up to 6% of salary. On a $75,000 salary, contributing 6% ($4,500) triggers $2,250 of employer money — an instant, guaranteed 50% return before any market growth. No other investment legally available to retail savers offers that. If you contribute below the match cap, raising your rate to the cap is the single highest-yield financial move you can make.
One caveat: vesting. Your own contributions are always yours; match money may vest over 2–6 years. If you're planning a job change, check the schedule — leaving months before a vesting cliff can cost thousands.
What the 2026 limits allow
Employee contributions are capped at $24,500 for 2026 ($32,500 including catch-up at 50+, with a higher "super catch-up" for ages 60–63). The combined employee-plus-employer limit is far higher ($72,000). Most savers never hit these ceilings — but high earners doing the math on maxing out should also look at the compound interest calculator for taxable-account savings beyond the cap.
Reading your projection honestly
- The final number is in future dollars. At 2.5% inflation, $1.5 million in 35 years buys what ~$630,000 buys today. Judge the number accordingly, or re-run the projection with a 4–4.5% "real" return to think in today's dollars.
- Straight-line growth is a simplification. Real markets deliver the average through swings of ±20% or worse. The average is a fair planning tool decades out; it's a poor one within 5 years of retirement, where the withdrawal math takes over.
- Salary growth cuts both ways. Raises grow your contributions automatically (this calculator models that), but they also raise the lifestyle your savings must eventually replace.