Retirement Calculator

How the projection works

A retirement balance is your current savings compounded forward, plus every future contribution compounded from the year it goes in. The second part matters more than most people expect, because money added at 40 has 25 years to grow and money added at 60 has five.

final = balance × (1 + r)ⁿ + annual contribution × ((1 + r)ⁿ − 1) ÷ r

Where r is the expected annual return and n the years to retirement. The second term is the future value of an annuity — the standard way to value a stream of regular payments.

The employer match is the highest return available

A typical match is "50% of the first 6%" — contribute 6% of salary and the employer adds 3%. That is an instant 50% return on the matched portion, before any investment growth. No market delivers that reliably, which is why matched contributions come before every other savings decision.

Contributing less than the match limit leaves money on the table permanently — you cannot go back for it. Contributing more than the limit still helps you, but earns no additional match.

Safe harbor plans are a specific design that exempts the employer from annual nondiscrimination testing in exchange for a guaranteed contribution. Their practical advantage for you is that safe harbor contributions are immediately 100% vested, where a standard match often vests over three to six years.

Roth or traditional

The comparison reduces to a single question: is your tax rate higher now or later? If the rate is identical at both ends, the two are mathematically equivalent — the maths is symmetric, and neither wins.

In practice Roth carries three advantages that do not appear in the arithmetic. There are no required minimum distributions on a Roth IRA, so the money can stay invested indefinitely. Tax-free withdrawals do not push you into a higher bracket or increase how much of your Social Security is taxed. And a Roth is worth more per dollar of contribution limit, because the limit applies to after-tax money — $7,000 in a Roth is more real savings than $7,000 pre-tax.

The employer match is always traditional, regardless of which type you elect, so most people end up with both anyway.

How much do you need to retire?

The common answer is the 4% rule: you can withdraw 4% of the balance in the first year of retirement, adjust for inflation each year after, and have a high probability of the money lasting 30 years. Stated backwards, it becomes a target:

target = annual spending in retirement × 25

Two adjustments make these figures less alarming. Social Security typically covers a meaningful share of spending, so the portfolio only has to fund the gap. And most people spend less in retirement than while working — no commuting, no retirement contributions, and usually no mortgage.

The rule's known weakness is sequence of returns risk. A severe market fall in the first few years of withdrawals does far more damage than the same fall later, because you are selling assets while they are cheap. Many planners now use a more conservative 3.5%, or vary withdrawals with market performance.

Savings benchmarks by age

A widely used rule of thumb expresses targets as a multiple of current salary:

Treat these as direction rather than verdict. They assume a continuous career, a steady salary, and retirement at 67, and they are far above what most households actually hold — median balances run well below the targets at every age. Being behind the benchmark is normal, not disqualifying.

Contribution limits for 2026

Both 401(k)s and IRAs cap annual contributions, and the limits are revised most years for inflation. Employer matches do not count against your personal 401(k) limit — there is a separate, much higher combined cap.

Source: IRS Notice 2025-67, checked 17 September 2026.

So the practical ceilings this year are $24,500 under 50, $32,500 from 50, and $35,750 between 60 and 63 — plus up to $8,600 in an IRA alongside it.

That 60-to-63 band is a window, not a step. The higher catch-up was introduced by SECURE 2.0 and applies only in the calendar years you turn 60 through 63; at 64 it drops back to the ordinary $8,000. It is worth $3,250 of extra sheltered contribution a year for four years, and then it is gone — one of the few genuinely time-limited allowances in the US retirement system.

The Saver's Credit phases out above $80,500 for joint filers, $60,375 for head of household and $40,250 for single filers. Roth IRA eligibility phases out on its own schedule, which is why higher earners use the "backdoor" route of contributing to a traditional IRA and converting.

The compounding underneath all of this is the same maths as the compound interest calculator. To see how much of your salary actually reaches your account after tax and deductions, use the take-home pay calculator.