401(k) Match Optimizer

A common match formula is 100% of the first 3% of salary plus 50% of the next 2% - a "5% effective match." On a $80,000 salary, contributing 5% ($4,000) earns the full $3,200 match for $7,200 total going into your 401(k). Always contribute at least enough to capture the full match - it's an immediate, risk-free 50%–100% return.

If your employer matches up to 5% of salary and you contribute only 3%, you forfeit the match on the missing 2%. On a $80,000 salary, that's $1,600/year permanently gone. Over a 30-year career with 7% growth, that missed match alone would be worth roughly $160,000 at retirement.

Your own contributions are always 100% yours immediately. Employer match contributions may vest over time - common schedules are 3-year cliff (0% then 100% after year 3) or 5-year graded (20% per year). Leaving before fully vested forfeits the unvested portion. Check your plan's Summary Plan Description for details, especially when considering job changes.

After capturing the full match, the next priority depends on circumstances: contribute to an HSA if eligible (triple tax-advantaged), then to a Roth IRA (tax diversification, $7,000 limit in 2025), then back to maxing 401(k) ($23,500 in 2025, $7,500 catch-up at 50+). Beyond that, taxable brokerage. The match is the only "free money" tier, but tax-advantaged saving overall remains highly valuable.