401(k) Match: What Contributing Below the Match Costs Over 30 Years

• 1. A common formula
• 2. What the missed $900 a year grows to
• 3. Check three details in your plan
• 4. If cash is tight
• 5. Make it automatic
• Free tools

An employer match is part of your pay. Contributing less than the amount needed to get all of it leaves that part on the table. Here is what the gap looks like in numbers.

§1. A common formula

“50% match up to 6% of salary” means: for every dollar you put in, up to 6% of your salary, the employer adds 50 cents.

On a $60,000 salary:

§2. What the missed $900 a year grows to

Invested every year at an assumed 7% return, $900 a year is about $85,000 after 30 years. That is money the employer was willing to pay.

§3. Check three details in your plan

• The formula (50% up to 6%, 100% up to 4%, and so on).
• Vesting: some plans require a number of years before the match is fully yours.
• Per-paycheck matching: if you hit the annual limit early, some plans stop matching for the rest of the year unless they offer a “true-up”.

§4. If cash is tight

Getting to the full match first, then building the rest of the emergency fund, is a common order, because the match is an instant return. High-interest debt is the usual exception people weigh against it.

§5. Make it automatic

Raise the percentage at the start of the year or right after a raise, so the paycheck change is barely noticed.

§Free tools

• 401(k) match calculator: https://smartbudgetsheets.surge.sh/calculators/401k-match-calculator/?utm_source=nostr
• Roth vs traditional calculator: https://smartbudgetsheets.surge.sh/calculators/roth-vs-traditional-calculator/?utm_source=nostr
• Debt Payoff Planner, up to 8 debts (Payhip): https://payhip.com/b/PtBLU?utm_source=nostr
• 42 free budget templates, pay what you want ($0 is fine): https://smartbudgetsheet.gumroad.com/l/ngpkrb?utm_source=nostr

General information, not financial advice. Figures are rounded examples.