401(k) Calculator: How Much Should You Contribute?

If your employer offers a 401(k) match and you're not contributing enough to get the full match, you're leaving free money on the table. Literally. It's part of your compensation and you're saying "no thanks."

The Match Is Free Money

A common match is 50% of your contributions up to 6% of your salary. Translation: if you make $70,000 and contribute 6% ($4,200/year), your employer adds $2,100. That's an instant 50% return on your money before any investment gains.

Step one is always: contribute at least enough to get the full match. Always.

How Much Should You Contribute?

The general rule: 15% of your gross income toward retirement (including employer match). The 401(k) Calculator shows you exactly how different contribution rates affect your retirement balance.

Here's what $70k salary looks like at different contribution rates (8% average return, 30 years, 50% match up to 6%):

• 3% contribution: $571,000
• 6% contribution: $855,000 (with full match)
• 10% contribution: $1,140,000
• 15% contribution: $1,567,000

The difference between 6% and 15% is over $700,000. That's the difference between a comfortable retirement and a stressful one.

Traditional vs Roth 401(k)

Traditional: you contribute pre-tax dollars. Saves on taxes now, pay taxes when you withdraw in retirement.

Roth: you contribute after-tax dollars. No tax break now, but withdrawals in retirement are completely tax-free.

If you think you'll be in a higher tax bracket in retirement, go Roth. If you think you'll be in a lower bracket, go Traditional. If you're not sure, split it 50/50.