How it works
Every month between now and retirement, your own contribution and the employer match it earns are invested at the expected return you enter, compounding on top of your current balance. The employer match only applies up to the cap — contributing more than the cap grows your own balance faster, but doesn't grow the match. This is a nominal projection: the dollar figure is not adjusted for inflation, so it represents future dollars, not today's purchasing power.
n = (retirement age − current age) × 12
employer match rate = match % × min(own %, cap %) ÷ 100
monthly contribution = (own % + employer match rate) × salary ÷ 12
monthly r = expected return % ÷ 12 ÷ 100
balance at retirement = balance × (1+r)ⁿ + contribution × [((1+r)ⁿ − 1) ÷ r]
This model assumes a constant contribution rate and a constant annual return every year until retirement — real markets and real paychecks both vary year to year, so treat the result as a planning estimate rather than a guarantee.
Worked example
Age 30 retiring at 65, $20,000 starting balance, $80,000 salary, 6% own contribution, 50% employer match up to a 6% cap, 7% expected return.
- Months to retirement: (65 − 30) × 12 = 420 months.
- Employer match rate: 50% × min(6%, 6%) ÷ 100 = 3%.
- Monthly contribution: (6% + 3%) × $80,000 ÷ 12 = 9% × $80,000 ÷ 12 = $600/month.
- Monthly return r = 7% ÷ 12 ÷ 100 ≈ 0.0058333, so (1+r)⁴²⁰ ≈ 11.506.
- Growth on the starting balance: $20,000 × 11.506 ≈ $230,123.
- Growth on contributions: $600 × [(11.506 − 1) ÷ 0.0058333] ≈ $1,080,633.
Total projected balance at 65: ≈ $1,310,756 in nominal (not inflation-adjusted) dollars.
Common questions
Why isn't this adjusted for inflation?
This shows the nominal dollar amount your account would grow to — it doesn't shrink that number for future inflation, which is a separate (and less certain) assumption. To think in today's purchasing power, a common rule of thumb is to subtract roughly 2–3% a year from the return rate as a rough real-return estimate.
How does the employer match cap work?
The cap limits how much of your contribution the match applies to — with a 50% match up to a 6% cap, contributing 6% of salary gets you the full 3% employer match, but contributing 10% still only gets matched up to that same 6%, not the full 10%.
Is a 7% return rate realistic?
It's a commonly used long-term average for a diversified stock-heavy portfolio before inflation, though actual returns vary significantly year to year and aren't guaranteed. Try a lower rate (5–6%) for a more conservative projection.