Penny Runs the NumbersOn a $64,000 salary, putting in 6% with a 50%-up-to-6% employer match, skipping your 401(k) for three years at 25 means $17,280 never invested ($11,520 yours, $5,760 free match). At a 5% real return that is $110,429 less at 65 in today's dollars, the same as working three extra years. For skipping to come out ahead, the market would have to fall more than 36.6% right after year three, and you would have to reinvest at the exact bottom.
What the calculator shows
Set your age, salary, how much you put in and your employer's match formula, then choose how many years you skip. The cards show what you did not invest (your money and the match), what that costs at retirement, how long you would have to keep working to catch up, and a crash test.
Everything is in today's dollars: the return is after inflation and the salary stays flat in real terms. Contributions are capped at the 2026 IRS limit of $24,500 a year, plus the $8,000 catch-up from age 50 ($11,250 at ages 60 to 63).
Why three years cost six times what you skipped
Money you put in at 25 has about forty years to grow. At 5% a year after inflation, the $17,280 from three skipped years grows to $110,429 by 65, 6.4 times the original amount. Part of it, $36,810, is the employer match you never received.
With level contributions, every year you skip at the start costs exactly one extra year of work at the end: skip three years and you need to work until 68 to reach the same balance. Catching up with your own money instead takes about $91 more a month for the remaining 37 years.
What if the market really crashes?
The match works like an instant gain, so a crash first has to erase it. With a 50%-up-to-6% match, three years of contributions grow to $18,158; you would have kept $11,520 of your own money as cash. The market has to drop more than 36.6% right after you invest, and you must then buy back at the exact bottom, for skipping to win.
With the IRS safe-harbor match (100% of the first 3% plus 50% of the next 2%) the break-even drop is 42.9%, and with a 100% match up to 6% it is 52.4%. The worst calendar year for the S&P 500 since 1928 was 1931, at -43.84%.
Questions
How much does skipping a 401(k) for 3 years cost?
With the default inputs ($64,000 salary, 6% contribution, 50% match up to 6%, age 25, 5% real return), three skipped years cost $110,429 at 65 in today's dollars, from $17,280 that was never invested.
What is the 401(k) contribution limit for 2026?
The IRS elective deferral limit for 2026 is $24,500. Workers 50 and older can add an $8,000 catch-up contribution, and workers aged 60 to 63 can add $11,250 instead. The calculator caps your contribution at these limits.
Should I stop contributing to my 401(k) if a crash is coming?
The calculator does not give advice, but it shows the math: with a 50% match, a crash would need to exceed 36.6% right after your third year of contributions, and you would need to reinvest at the bottom, for skipping to beat investing. With a 100% match the drop must exceed 52.4%.
What does this calculator leave out?
It ignores income taxes (pre-tax view), fees, vesting schedules, salary raises and year-to-year return swings. It assumes one deposit at the end of each year and a constant real return; the 5% return and the default match formula are assumptions you can change.
Sources and assumptions
- 2026 401(k) elective deferral limit ($24,500), catch-up at 50+ ($8,000), ages 60-63 ($11,250): IRS, 401(k) limit increases to $24,500 for 2026 (IR-2025-111) and Notice 2025-67 (checked 2026-11-11)
- Median usual weekly earnings of full-time wage and salary workers, Q3 2026: $1,232 x 52 = $64,064, rounded to $64,000: U.S. Bureau of Labor Statistics, Usual Weekly Earnings of Wage and Salary Workers, Third Quarter 2026 (released 2026-10-21) (checked 2026-11-11)
- Default employer match: 50% of your deferral on the first 6% of pay (assumption: a common plan design). The calculator also offers the IRS safe-harbor basic match (100% of the first 3% + 50% of the next 2%) and 100% up to 6%.: assumption for the default; safe-harbor formula from Treasury regulations (T.D. 9169) (checked 2026-11-11)
- ASSUMPTION: 5% real annual return: assumption, checked against Damodaran (NYU Stern) historical returns (checked 2026-11-11)
- Worst calendar year for the S&P 500 with dividends since 1928: 1931, -43.84% (2008: -36.55%): Damodaran (NYU Stern), Historical Returns on Stocks, Bonds and Bills 1928-2025 (checked 2026-11-11)
- Everything is in today's dollars: salary flat after inflation, 401(k) limits held at 2026 levels, real return.
- One deposit (your deferral + the match) at the end of each year of work; a constant return every year, no fees.
- Pre-tax view: income tax on contributions and withdrawals, vesting schedules and Roth vs traditional are ignored.
- Crash test: the money from the skipped years is invested, then the market drops by the chosen percentage right after the last skipped year. Compared with keeping your own deferrals as cash (0% real), which never earns the match.
Last updated 2026-11-11.