Excellent adviceYour questions are common and valid. And I agree that the information in the screen shot isn't presented terribly clearly. So I'll give you my interpretation, but you need to consult with your HR department for a final ruling. I promise, they get those questions all the time and are used to answering them.
A few things to start:
First, your company offers a choice between a traditional 401k and a Roth 401k. That's a good thing. It's also separate and apart from the Roth IRA you have at Morgan Stanley -- two totally different things.
Second, my reading of the second sentence under Employer Match is that your company unfortunately doesn't match your contributions up to 5% of your salary. They match 50% of your contributions to the extent of 5% of your salary. Effectively, a cap on the match of 2.5% of your salary. That's still good. You get 7.5% in your account, but only have to contribute 5%. That's a 50% return on that portion of your contributions. While it's not as good as a 100% match, it's still way better than you can get anywhere else out on your own.
Third, the information doesn't explicitly say that the match applies to the Roth 401k option. I'd have to think it probably does, but you need to verify that with your HR department.
The answer to your question about what happens if you contribute $10,000 depends on your salary.
Let's say your salary is $75K a year, and that you contribute $10K into the 401K the first year you're eligible.
5% of your $75K salary is $3,750. Your company matches that at 50% -- or $1,875. Plus, you're contributing an additional $6,250 that isn't getting matched (the difference between $10,000 total you're putting and the $3,750 that is getting matched).
So you end up with a grand total contributed into your account of:
$3,750 the part of your $10K contribution that's eligible for your company match, plus
$1,875 the dollar amount that your company puts in as your match, plus
$6,250 that you contribute on top of what is being matched
$11,875 Grand Total Contributions
Obviously, you'd need to adjust those numbers to reflect your actual salary.
A few additional thoughts:
1. I hear a lot of young people (and some older ones) say that they've "maxed out" their 401k contributions when they do enough to get the full company match. Unless their salary is well over $250K, that's garbage. You're not "maxed out" until you're contributing the maximum the IRS allows -- in 2019 that's $19K, and $25K if you're over 50.
Admittedly, that's not easy to do. Here's how Mrs. Basket Case and I did it: We started out contributing all we could. On top of that, we effectively didn't get a raise for several years. What I mean is that every time we got a raise, we increased our 401k contribution by the amount of the raise. We did that for about 6-7 years, and finally got there. It was a pain for a while, but soon enough it was built into our lifestyle, and largely painless. The reward at the end of that time -- a really nice start on a retirement nest egg -- was incredibly gratifying.
2. Use debt wisely. Borrow as little as you possibly can to buy depreciating assets (like a car). Buy used. Don't ever borrow to fund experiences -- vacations, concert tickets, dinners out, etc. If you put that stuff on a credit card to get miles or bonus rewards, be sure to pay it off every month -- if you can't do that, you can't afford whatever it is. The first time you have a credit card bill made up of experiences, and you can't pay it off in full, that should be a big, loud, whanging wake-up call.
If you borrow to buy a house (and almost nobody can pay cash for their first one), have the payment on a 15-year schedule, not 30. Later, if you upgrade your house, keep the payment on the original schedule. Example: say you buy your first house and have the 15-year schedule. Three years later, you upgrade to a nicer house. Your payment schedule on the new house is 12 years. Three years later, you upgrade again. That mortgage is on a 9-year schedule. The idea is to have whatever house you're in at the time debt-free 15 years after your first purchase.
I don't agree with Dave Ramsey on everything, but he's got the debt thing right. Live like nobody else for a while, so you can live like nobody else forever afterward.
3. Ignore jackasses braying at social gatherings about their new cars, their vacations, their house, whatever. Almost invariably, they're selling their souls to impress you. Be far more concerned with impressing yourself than bragging to others. You'll be amazed how often those same public braggarts come to you in private, after the party's over, asking for advice on their impossible financial situation....in other words, you're actually impressing them far more than they want the world to know.
4. Don't confuse gambling with investing. Never have more than 10% of your portfolio in any one investment. Diversify, diversify, diversify.
5A. The most important thing: Start young, as you already have. Keep it up. For you, time is your most valuable asset. But it is also your most perishable. People that spend everything they can while young wake up at about age 40-45 and realize that they're in deep trouble, with nowhere near enough time to work themselves out of it.
5B. I know it seems counter-intuitive, but while you're young, recessions are actually your friend. You keep on keeping on with your investments, buying stocks while they're down. Later, when the recession lifts and the stock markets come back (and they always do), this is where you really make hay on the stuff you bought cheap while everybody else was scared and not investing at all. During a recession, turn off the TV news, keep your head about you, and keep on investing. This doesn't hold if you're 5 years or less out from retirement, but at your age it definitely does.
Yes, it's hard. And it takes between 7 and 10 years to really start seeing the rewards. I liken it to starting a bike ride in 21st gear. It's hard, and you're putting out a lot of effort, and not getting much of anywhere early on, and it sure would be easier to just get off the [stupid] thing. But gradually it gets easier and easier until finally you're cruising along at a pretty sporty clip.
It's not easy, but nothing worthwhile ever is. And the financial and emotional rewards in the end are just incredible. OK, off the soapbox.