It uses compound interest to project your balance at retirement, combining your existing balance, monthly contributions from both you and your employer, and the expected annual investment return.

Many employers match a percentage of your contributions up to a limit of your salary. For example, a 50% match up to 6% of salary means if you contribute 6%, your employer adds 3% — effectively free money.

At minimum, contribute enough to get the full employer match. A common rule of thumb is to save 10–15% of your income for retirement (including any employer match).