A 401(k) has three ceilings, and they bind in a fixed order
Most calculators treat a workplace plan as a savings account with a percentage on it. The arithmetic is that simple; what is not simple is that the law puts three separate ceilings over it, and each one bites in a different place. This page applies all three, in the order the statute applies them, and tells you which one reached you first.
The first is on the pay a plan may take into account at all. Above that figure your salary stops mattering: a percentage of pay stops rising and so does any match calculated on pay. The second is on what you may defer out of your own wages across every workplace plan you have — not per employer, per person. The third sits over everything that goes into one account in a year, your money and your employer's together, and it is much higher than the second, which is why it usually only appears for people whose employer is unusually generous or who are also getting profit sharing.
When the total for a year is over that third ceiling, something has to give, and the statute does not say which side. This page cuts the employer's share, so the percentage you typed stays the percentage you see. That is a convention, not a rule, and your plan administrator may do it the other way round.
The match is the part worth getting right
An employer match is usually written as two numbers: a share of what you put in, applied only to contributions up to a share of your pay. "Half of what you put in, on the first six per cent" means that contributing six per cent gets the whole match and contributing ten per cent gets exactly the same match on a bigger contribution of your own. The form asks for both numbers because getting one of them wrong changes the answer by more than any of the investment assumptions do.
Below the match threshold, the employer's money is the highest return available to almost anybody: it arrives the moment your contribution does. Above it, a workplace plan is competing on its own merits with every other account you could use, which is the point at which an individual retirement account becomes worth considering.
Catch-up amounts, and the window most people miss
From the year you turn fifty, the ceiling on your own deferrals rises by a catch-up amount. Less widely known is that for the four years in which you turn sixty, sixty-one, sixty-two and sixty-three, a larger catch-up replaces it — replaces, not adds to — and then the ordinary one comes back. The test in both cases is the age you reach during the calendar year, not the age you are on the day you contribute, which is why the form asks for an age rather than a date of birth.
Ceilings move, and a projection that ignores that is wrong for high earners
Every one of these figures is adjusted for the cost of living each year. A thirty-year projection that holds them at today's level puts anybody near the limit into the ceiling far too early and understates the result. This page raises them by the same inflation rate you assume elsewhere on the form. The statute rounds each ceiling down to its own multiple and the projection does not, so a projected ceiling is within one rounding step of the real one — a rounding difference far smaller than the error in any assumption about returns.
What this does not do
It does not model tax. Money in a traditional workplace plan is taxed when it comes out, at whatever rate applies then, and the figure on this page is before that. It does not model vesting, so employer money that you would forfeit by leaving early is counted here as yours. It does not model plan loans, hardship withdrawals, the penalty on early withdrawals, or required minimum distributions. And it assumes one steady rate of return, which no real portfolio has ever delivered.