Maximising retirement plan contributions
Contributing to a retirement scheme through payroll deduction allows you to benefit from employer match matching contributions—effectively free money—and valuable tax incentives.
Increasing your contribution by just 1% to 2% early in your career produces an outsized impact on final retirement wealth due to exponential compounding.
Worked example: Contribution breakdown
On a $40,000 gross annual salary, contributing 5% ($2,000/yr or $167/mo) with a 3% employer match ($1,200/yr or $100/mo) invests $3,200 annually ($267/mo) into your retirement fund. Assuming 20% tax savings, the net reduction in your take-home pay is only $133 per month.
Inputs for the pension contribution calculator
Salary & Contribution Rates
Enter gross salary and personal/employer contribution percentages.
CALCULATOR QUESTIONS
Pension contribution calculator questions
Why should I always capture my full employer match?
Employer matching offers an immediate 50% to 100% guaranteed return on your contributed dollars before any market growth occurs.