Projected Balance at 65
$1,641,125
After 35 years of saving
Your Contributions $233,975
Employer Match $116,987
Investment Gains $1,265,163
Starting Balance $25,000
Years to Retirement 35 years
Monthly Income (4% Rule) $5,470
Annual Income in Retirement $65,645

Retirement Savings Growth

Maximizing Your Retirement Savings

Understanding 401(k)s and employer matching is key to building a secure retirement nest egg.

Free Money: Employer Match

An employer match is essentially free money added to your retirement account. Always contribute enough to get the full match.

  • Common match: 50% of contributions up to 6% of salary.
  • Some employers offer 100% match or higher limits.
  • Vesting schedules may apply - check your plan details.
  • Not taking the full match is leaving money on the table.

2024/2025 Contribution Limits

The IRS sets annual limits on how much you can contribute to retirement accounts.

  • 401(k) limit: $23,000 (2024), $23,500 (2025).
  • Catch-up (50+): Additional $7,500 per year.
  • IRA limit: $7,000 ($8,000 if 50+).
  • Total 401(k) + employer: $69,000 (2024).

Tax Advantages

Understanding the tax benefits of retirement accounts helps you choose the right strategy.

  • Traditional 401(k): Tax-deferred growth, taxed at withdrawal.
  • Roth 401(k): After-tax contributions, tax-free growth.
  • Lower tax bracket now? Consider Roth.
  • Higher tax bracket now? Traditional may be better.