Updated 10/24/2026
Quick answer: If your employer matches 50% of what you put in, up to 6% of pay, and you put in only 3%, you leave half the match behind. At a $75,000 salary that is $1,125 a year. Raising your contribution to 6% collects it.
How a match works
A match is money your employer adds to your 401(k) when you contribute. Common formulas are “50% up to 6% of pay” and “100% up to 4% of pay”. Your plan’s Summary Plan Description has the exact formula.
What you lose below the match
| Salary | You put in 3% (match 50% up to 6%) | Match you miss per year |
|---|---|---|
| $50,000 | $1,500 | $750 |
| $75,000 | $2,250 | $1,125 |
| $100,000 | $3,000 | $1,500 |
An illustration, not a promise: $1,125 a year invested for 20 years at 7% grows to about $46,000.
“I can’t afford 6%.” Check the real cost
Traditional 401(k) money comes out of your paycheck before federal income tax, though Social Security and Medicare tax still apply. In the 22% bracket in a no-income-tax state like Texas, putting in $100 more lowers your take-home pay by about $78. With a 50% match, that $78 puts $150 into your account.
Vesting: when the match becomes yours
What you contribute is always 100% yours. The employer match may vest over several years, so leaving early can cost part of it. Check your plan’s vesting schedule before changing jobs.
Limits
For 2026, you can put in up to $24,500. The IRS announces the 2027 limit in November 2026; forecasts point to $25,000 to $25,500, but that is not official yet.
If you change jobs or move abroad
The money stays yours. You can leave it in the plan or roll it into an IRA. Taking it out before age 59½ usually adds a 10% extra tax on top of income tax.
Put it on autopilot
- Set your contribution as a percentage, not a dollar amount, so raises increase it automatically.
- Turn on automatic increase (for example, +1% each year) if your plan offers it.
- If you have never picked investments, a target-date fund near your retirement year is a common default.
Get the official 2027 401(k) limit by email
One short email when the IRS makes next year's limits official, plus a one-page checklist. No spam. Unsubscribe any time.
See your match next to your HSA, childcare and other benefits: Family Money Autopilot.
Sources
- 401(k) Specialist: 2026 limit $24,500 (IRS Notice 2025-67)
- 401(k) Specialist: 2027 forecast
- IRS Topic 424: 401(k) plans
- IRS: Retirement topics, vesting
- IRS Topic 558: additional tax on early distributions
This is education, not tax, legal or financial advice. Check your plan documents or a tax professional for your situation.