How a 401(k) Grows (2026): Contributions, the Match, and the IRS Limits

Short answer: A 401(k) grows from three streams at once: the percentage of salary you defer, the match your employer adds on top of it, and investment growth applied to both. On an $80,000 salary growing 3% a year, deferring 6% with a 50% match on the first 6% of pay and earning 6% a year produces $113,699.33 in 10 years, of which $55,026.62 is your own money and $27,513.31 is the match. Keep the same inputs running for 30 years and the balance reaches $843,648.58, at which point growth, not contributions, has supplied most of it. Run your own salary and percentage on the 401(k) Calculator as you read.

By Finance Editorial Desk | October 21, 2026

Educational only, not tax, legal, or investment advice. Every saver in this guide is a labeled hypothetical built to show the arithmetic. The growth figures are the output of this site's 401(k) Calculator model, whose assumptions are stated in full in section 2. The 2026 contribution limits are taken from IRS News Release IR-2025-111 and Notice 2025-67, both published November 13, 2025, and are named where they are used. Your plan's own document governs your match formula, vesting, and eligibility.

1. Three streams, one balance

Most savers describe their 401(k) as "my contributions plus growth." That description hides the stream that matters most in the early years.

Your deferral. A percentage of each paycheck, taken out before it reaches you. It is the only stream you directly control, and section 4 shows it is also capped by law, which is why the percentage that works at one salary can be illegal at another.

The employer match. Money the employer adds because you deferred. It is real compensation that only arrives if you contribute, and it is calculated by a formula in your plan document, typically something like a stated percentage of the first stated percentage of salary you defer. Leave the deferral below the formula's cap and the unclaimed part of the match does not roll forward. It is simply not paid.

Growth. Whatever the invested balance earns, applied to everything already in the account: your deferrals, the match, and all prior growth. Growth is the smallest stream in year one and the largest by year thirty, which is why the horizon changes every conclusion in this guide.

The balance at any year is just the three streams accumulated: each year's deferral and match are added, then the whole balance is grown by the year's return. Nothing else is happening inside the account. Fees, fund performance, and job changes all act on one of those three streams, and section 6 takes them in turn.

2. The spine example, run three ways

The 401(k) Calculator on this site uses one stated model: contributions and match are credited at the start of each year, then the balance grows by the assumed annual return. Its published worked example, and the spine of this guide, is a saver earning $80,000 with 3% annual salary growth, a 6% deferral, an employer matching 50% of the first 6% of salary deferred, and a 6% annual return.

Ten years. Your deferrals total $55,026.62. Because the match pays 50 cents per dollar on the full 6%, the match totals exactly half your deferrals: $27,513.31. Together you put in $82,539.93, and growth adds $31,159.40, for a balance of $113,699.33. Notice the ordering: after a decade, growth has contributed less than the match did. Early in a saving career, the match is the second engine, not the market.

Twenty years. Your deferrals total $128,977.80 and the match $64,488.90, so $193,466.70 goes in. Growth now adds $162,953.87, more than the match and closing on your own contributions, for a balance of $356,420.57.

Thirty years. Deferrals reach $228,362.00 and the match $114,181.00, a combined $342,543.00 in. Growth contributes $501,105.58, which is more than both contribution streams combined, and the balance reaches $843,648.58. This is the crossover every long-horizon saver eventually passes: the point where the account's own earnings out-earn the saver. It arrives late, which is precisely why starting the streams early matters more than tuning them.

One more property of the spine is worth seeing before the limits arrive. The match at these inputs is always exactly half the deferral, because 50% of 6% of salary is 3% of salary going in as match against your 6%. Change either the match rate or the cap and that clean ratio disappears, which is why the calculator takes the match as two numbers, a rate and a percentage-of-salary cap, rather than one.

A starting balance rides on top of all three streams without interacting with them. Give the spine saver a $50,000 balance on day one, from a rolled-over former plan, and that money simply compounds at the model's 6%: it is worth $89,542.38 after ten years on its own, and the ten-year total becomes $203,241.71 instead of $113,699.33. Nothing about the deferral, the match, or the limits changes; the streams are additive. This is why two savers with identical percentages and identical salaries can be six figures apart: one of them has a head start compounding quietly underneath the same habit, and the calculator's starting-balance field exists so that saver can see their own number rather than the from-zero one.

3. The match is a cliff, not a slope

Run the spine at a 3% deferral instead of 6%. Your deferrals over ten years halve to $27,513.31, as expected. The match, though, also falls to $27,513.31 in total over the decade, because the formula only pays on what you defer: at 3% deferred, the 50% match applies to 3% of salary, which is 1.5% of salary a year. The ending balance is $56,849.66, exactly half of $113,699.33. The linearity is a feature of this model (the match cap of 6% is not binding at either deferral), but the lesson survives outside it: contributing below the match cap does not reduce your outcome proportionally to your effort. It reduces it dollar for dollar on the match as well, and the forgone match in this example, $27,513.31 over ten years before growth, is money the employer offered and the saver declined.

The practical rule is older than any calculator: contribute at least enough to claim the full match before optimizing anything else. A saver choosing between raising a deferral from 3% to 6% and picking a better fund is not facing equivalent decisions. The first buys an immediate 50% return on the added dollars, courtesy of the match. The second argues about fractions of a percent.

Two qualifiers keep the rule honest. First, matches can vest on a schedule, so a match claimed by an employee who leaves early may be partly forfeited; the calculator, like this guide, treats the match as fully yours, and your plan document says otherwise if it does. Second, some plans match per paycheck with no year-end true-up, so a saver who front-loads deferrals early in the year can miss match in the months when nothing is left to defer. Both are reasons to read the plan document, not reasons to defer less.

Past the cap, the arithmetic changes character but does not stop working. Run the spine at a 10% deferral: your ten-year deferrals rise to $91,711.03, while the match stays exactly where it was, $27,513.31, because the formula caps out at 6% of salary and the extra four points earn no match at all. The ending balance is $164,232.36 against $113,699.33 at 6%. The extra $36,684.41 you deferred became an extra $50,533.03 of balance, the difference being $13,848.62 of growth on the added money. There is no 50% instant return on dollars past the cap, and there does not need to be: unmatched deferrals still compound tax-deferred for decades, which is the entire second act of section 2. The cap tells you where the match ends. It does not tell you where saving stops paying.

4. The 2026 IRS limits, against real salaries

The calculator on this site deliberately does not enforce the legal limits; it will project any percentage you type. That makes the limits your job, and for 2026 they are set by IRS News Release IR-2025-111 and Notice 2025-67 (November 13, 2025):

• Elective deferral limit: $24,500 for 2026, up from $23,500 in 2025. This caps your own contributions across plans.
• Catch-up contribution, age 50 and over: $8,000, for a total of $32,500.
• Higher catch-up, ages 60 to 63: $11,250, under the SECURE 2.0 provision, for a total of $35,750 at those ages.
• Overall annual additions limit (section 415(c)): $72,000, covering your deferrals, the match, and any other employer contributions combined.
• Annual compensation cap: $360,000; salary above this cannot be counted when calculating contributions or match.

A limit stated in dollars is hard to feel. Stated as the percentage of salary that maxes the account out, it becomes a check anyone can run against their own deferral setting:

Read the spine against the first row: the guide's saver, deferring 6% of an $80,000 salary, is nowhere near the cap, and even tripling the deferral to 18% would stay legal. The saver who needs this table is the high earner with an aggressive percentage, and the saver over 50 who has not noticed that the catch-up raised their ceiling. If your percentage multiplied by your salary exceeds the row that applies to you, the excess does not compound. It comes back, with paperwork.

The catch-up deserves its own arithmetic, because savers consistently underrate it as a rounding allowance. The 50-and-over catch-up adds $8,000 of room a year. Used every year for ten years at a 6% return, with each year's contribution credited at the start of the year the way this site's model credits contributions, that room alone is worth $111,773.14 of ending balance: $80,000 of contributions and $31,773.14 of growth on them. That is within a few hundred dollars of the spine saver's entire ten-year balance in section 2, produced by nothing but the extra room and a decade of using it. The catch-up is not a consolation prize for starting late. Priced properly, it is a second ten-year plan stacked on top of the first, and it is the strongest argument in this guide for raising the deferral on a fiftieth birthday rather than at retirement's door.

One limit in the list rarely binds, and it is worth knowing why. The $72,000 annual additions ceiling counts everything entering the account in a year: your deferrals, the match, and any other employer money. The spine saver puts in 9% of salary in total (6% deferral plus 3% match), which is $7,200 in the first year, a tenth of the ceiling. Even at the $360,000 compensation cap, a 9% total contribution rate is $32,400, still under half the ceiling. The additions limit is built for owners and highly compensated employees with very large employer contributions; for a wage earner with a typical match formula, the deferral limit in the table is the wall, and it is not close. Knowing which limit actually applies to you is the difference between checking one number each January and worrying about five.

5. Pre-tax or Roth: same arithmetic, different tax year

The growth model in this guide is indifferent to the choice between pre-tax and Roth deferrals, and that indifference is itself the point worth understanding. A dollar deferred pre-tax reduces this year's taxable income and is taxed, with its growth, when withdrawn. A Roth dollar is taxed this year and, for qualified withdrawals, never again. The compounding in sections 2 and 3 runs identically either way; what changes is which year's tax bill the contribution touches.

The honest comparison is therefore about tax rates, not about the account. Pre-tax wins if the rate on withdrawal is lower than the rate avoided today. Roth wins if it is higher. Anyone who states a winner without asking about both rates is selling something. Two structural notes are safe to make without your numbers: the IRS limits in section 4 count pre-tax and Roth deferrals together against the same $24,500, and the employer match has traditionally gone into the pre-tax side of the account regardless of which side your own deferrals choose, so even an all-Roth saver usually retires with a pre-tax balance from the match to plan around.

The practical consequence for reading this guide: every balance in it is a pre-tax balance if the deferrals were pre-tax. Spendable money is what remains after the withdrawal tax. At a purely illustrative 20% rate on withdrawal, the spine's ten-year balance of $113,699.33 is $90,959.46 of spendable money; at 12% it is $100,055.41, and at 25% it is $85,274.50. The same balance, three different retirements, decided entirely by a rate nobody knows yet. A Roth balance of the same size is the whole amount, because the tax was settled on the way in. Comparing a projected traditional balance against a projected Roth balance without applying that haircut to the traditional side is the most common way savers misread their own projections, and it is why the calculator reports the balance and leaves the tax year arithmetic to you and your actual rates.

6. What the smooth model leaves out

The calculator's model is smooth by construction: one return, every year, contributions credited in a lump at the start of the year. Reality differs in ways that matter, and naming them is part of using the projection well.

Returns arrive in an order. A decade averaging 6% with the losses early ends richer than the same average with the losses late, because late losses strike a larger balance. The single-rate model shows the average path, not any lived one.

Fees compound too. A plan charging 1% a year more than another is applying section 2's arithmetic against you, on the full balance, every year. The calculator's return input is net of nothing; if your plan's funds charge, the honest input is the expected return minus those charges.

Jobs change. A deferral percentage is per employer. Changing jobs mid-year restarts the match formula, sometimes the vesting clock, and always the paperwork, while the IRS deferral limit in section 4 follows you across employers. Savers with two plans in one year are the ones who breach limits by accident.

Vesting decides whose match it is. Your own deferrals are always yours. The employer's contributions may not be, yet: plans can require years of service before the match is fully vested, and federal law caps the slowest schedules at a 3-year cliff (nothing, then everything) or a 6-year graded schedule (a rising percentage each year). On the spine, the match contributed across the first three years totals $7,418.16 before growth. A saver who leaves a cliff-vesting plan at two years and eleven months walks away from roughly that stream and everything it would have compounded into, which over a thirty-year horizon is several times the $7,418.16 itself. The calculator treats the match as fully vested from day one. Before a job change, the vesting schedule in your plan document is worth more than most fund choices you will ever make.

Payroll timing. Real deferrals arrive each paycheck, not in a January lump. Crediting them at the start of the year, as the model does, slightly flatters the result against a per-paycheck reality. Over thirty years the flattery is small relative to the streams themselves, but it is there, and it grows with the contribution rate.

None of this argues against projecting. It argues for treating the output as the center of a range, and for re-running the projection when a stream changes: a raise, a new match formula, a job move, a limit increase each January.

7. A checking routine that takes ten minutes

1. Find your match formula in the plan document or benefits portal: a rate, and the percentage of salary it applies to. If you cannot state both numbers, that is the finding.
2. Set your deferral at least to the formula's cap. Below it, part of your compensation is unclaimed, as section 3's halved balance shows.
3. Check your percentage against the 2026 limits using the table in section 4, especially if you changed jobs, turned 50, or raised your percentage this year.
4. Raise the deferral with your raises. The spine's salary grows 3% a year; a deferral that grows with it is how the thirty-year column happens.
5. Re-run the calculator when anything changes, including the January limit announcements, and compare the new thirty-year figure with the last one you saw. The difference is the price or the prize of the change, stated in the only unit that matters: the ending balance.

The 401(k) rewards the unglamorous: a percentage set high enough to claim the full match, left running, inside the legal limits, for as many years as possible. The arithmetic in this guide is the whole argument: $82,539.93 of contributions becoming $113,699.33 in a decade is modest; the same habit becoming $843,648.58 over thirty years is what the match and the crossover do to a saver who simply does not stop.