SIMPLE IRA Calculator

Estimate your annual SIMPLE IRA contributions and project your total savings at retirement. This calculator shows how your employee deferrals, employer contributions (match or non-elective), and investment returns can grow your balance over time. Simply enter your salary, contribution rates, and timeline to see a year-by-year projection.

This tool is designed for small business owners and their employees who use or are considering a SIMPLE IRA plan. If you are exploring other small business retirement options, you may also find our SEP IRA Contribution Calculator or 401(k) Calculator useful. Understanding these differences is key to choosing the right plan for your needs.

The calculator provides a detailed breakdown of your annual savings, including your employee deferral and the employer's contribution. You will see a growth chart projecting your balance until retirement, a "Deferral Utilization" score showing how much of the annual limit you are using, and insights comparing your potential growth to other plans like a 401(k) or SEP IRA.

Begin by entering your financial details in the "Income & Deferrals" section. Your Annual Salary is your gross pay for the year. The Employee Deferral Rate is the percentage of that salary you choose to contribute from your paycheck. The calculator will automatically cap this at the legal limit.

Next, configure the "Employer Contribution" section. The Employer Match Type determines how your employer contributes. A value of 1 signifies a dollar-for-dollar match, while 0 represents a non-elective contribution. If you select the match, enter the Employer Match Rate, which is the percentage of your salary your employer is willing to match (up to a maximum of 3%).

In the "Growth Projection" section, provide your timeline and investment assumptions. Input your Current Age and planned Retirement Age to set the savings window. Add your Current SIMPLE IRA Balance to give the projection a starting point. Finally, enter your Expected Annual Return as an average percentage you anticipate your investments will earn each year.

For those age 50 or older, you can enable catch-up contributions in the "Additional Options" section. Setting Catch-Up Eligible to 1 increases your maximum allowed deferral, helping you save more as you approach retirement.

Annual Salary and Employee Deferral Rate

Your Annual Salary is your total pre-tax compensation for the year. This figure is the basis for calculating both your employee deferrals and your employer's potential contribution.

The Employee Deferral Rate is the percentage of your salary you elect to save in your SIMPLE IRA. For 2026, the maximum you can defer is $16,500. This calculator automatically applies that limit, even if your deferral rate multiplied by your salary exceeds it. For a broader view on savings rates, see how much you should save for retirement each month.

Employer Match Type and Rate

A SIMPLE IRA requires the employer to contribute. They have two choices:

1. Matching Contribution: The employer matches employee contributions dollar-for-dollar, up to a certain percentage of the employee's salary. The Employer Match Rate you enter can be up to 3%. If an employee contributes enough to get the full match, this can be a powerful way to boost savings.
2. Non-Elective Contribution: The employer contributes 2% of each eligible employee's salary, regardless of whether the employee makes their own deferrals. This is a guaranteed contribution for all eligible participants in the plan.

Select the type that applies to your plan. If you choose the matching option, be sure to enter the correct match rate.

Current Age, Retirement Age, and Current Balance

Your Current Age and Retirement Age define your investment time horizon. A longer period allows for more contributions and more time for your investments to compound. Use our retirement age calculator to see how this timeline affects your overall readiness.

Your Current SIMPLE IRA Balance is the total amount you have already saved in the account. This is the principal amount that will be subject to investment growth from day one of the projection.

Expected Annual Return

This is the average annual rate of return you expect your investments to generate over the long term. This is a critical assumption that significantly impacts the final projection. A common long-term stock market average is between 7-10%, but you may want to use a more conservative number, especially if you have a balanced portfolio of stocks and bonds. This calculator uses a single rate, but in reality, how inflation affects retirement savings can also impact your real return.

Catch-Up Eligible (Age 50+)

Individuals aged 50 and over can make additional "catch-up" contributions to their retirement accounts. For a SIMPLE IRA in 2026, the catch-up amount is $3,500. This raises the total employee deferral limit from $16,500 to $20,000. Under the SECURE 2.0 Act, those aged 60-63 can make a "super catch-up" contribution of $5,250 (instead of $3,500), raising their total limit to $21,750. If you are 50 or older, enabling this option will give you a more accurate picture of your maximum savings potential.

This calculator performs a year-by-year projection to estimate the future value of your SIMPLE IRA.

1. Calculate Annual Contributions: First, it determines your annual employee contribution by multiplying your salary by your deferral rate, ensuring it does not exceed the 2026 limit of $16,500 (or $20,000 with catch-up contributions). Next, it calculates the employer contribution based on your selection: either a match up to 3% of your salary or a 2% non-elective contribution. These two amounts are summed to find the total annual contribution.
2. Project Annual Growth: The calculator starts with your current balance. For each year until your retirement age, it adds the total annual contribution and then applies the expected annual return to the new balance. This process repeats for every year in your savings timeline.
3. Provide Comparisons: To offer context, the calculator also runs parallel projections for a hypothetical 401(k) and SEP IRA using similar inputs. This helps you understand how the lower contribution limits of a SIMPLE IRA might compare to other plans over the long term.
4. Generate Score and Insights: The "Deferral Utilization" score is calculated by dividing your actual employee contribution by the maximum you're allowed to contribute. This provides a quick measure of how effectively you are using the plan's tax-advantaged space.

The calculations are performed annually in a loop from your current age to your retirement age.

Employee Deferral Calculation

The calculator first determines the maximum deferral allowed and then calculates your contribution.

max_deferral_limit = 16500
if catch_up_eligible is true:
  max_deferral_limit = 16500 + 3500

your_potential_deferral = annual_salary * (employee_deferral_rate / 100)
employee_contribution = min(your_potential_deferral, max_deferral_limit)

Employer Contribution (Match)

If the employer offers a match, the contribution is calculated as follows.

effective_match_rate = min(employer_match_rate, 3) / 100
matchable_amount = annual_salary * effective_match_rate
employer_contribution = min(employee_contribution, matchable_amount)

Employer Contribution (Non-Elective)

If the employer makes a non-elective contribution, the formula is simpler.

employer_contribution = annual_salary * 0.02

Yearly Growth Projection

For each year of the projection, the balance is updated.

total_annual_contribution = employee_contribution + employer_contribution
investment_growth = ending_balance_last_year * (expected_return / 100)
ending_balance_this_year = ending_balance_last_year + total_annual_contribution + investment_growth

A SIMPLE (Savings Incentive Match Plan for Employees) IRA is a retirement plan available to small businesses with 100 or fewer employees. It's designed to be easier and less expensive to set up and maintain than a traditional 401(k) plan.

Key features include:

• Employee Contributions: Employees can make pre-tax contributions (deferrals) from their paycheck, up to an annual limit. For 2026, this limit is $16,500.
• Mandatory Employer Contributions: Employers are required to contribute to their employees' accounts. They can either match employee contributions up to 3% of salary or make a 2% non-elective contribution to all eligible employees.
• Catch-Up Contributions: Employees age 50 and over can contribute an additional $3,500 in 2026. Under the SECURE 2.0 Act, those aged 60-63 can make a higher "super catch-up" of $5,250.
• Easy Administration: SIMPLE IRAs have fewer administrative and fiduciary responsibilities compared to 401(k) plans, making them attractive for small business owners.

However, a business cannot maintain any other retirement plan while offering a SIMPLE IRA. This makes it a streamlined, but sometimes limiting, option.

Choosing the right retirement plan is a critical decision for any small business. Here is how a SIMPLE IRA compares to two other popular options: the SEP IRA and the 401(k).

For many high-income, self-employed individuals, a SEP IRA or Solo 401(k) often allows for much higher savings than a SIMPLE IRA. For businesses with employees who want to save aggressively, a 401(k) offers the highest employee deferral limits.

It's crucial to understand the specific contribution limits for the current year. For 2026, the SIMPLE IRA limits are:

• Employee Elective Deferral Limit: $16,500
  • This is the maximum amount an employee can contribute from their salary.
• Catch-Up Contribution Limit (Age 50+): $3,500
  • This brings the total possible employee contribution to $20,000 for those 50 and older.
• SECURE 2.0 "Super" Catch-Up (Ages 60-63): $5,250
  • Under the SECURE 2.0 Act, those aged 60-63 can make a higher catch-up of $5,250 instead of the standard $3,500, bringing their total to $21,750.
• Employer Matching Contribution: Up to 3% of the employee's compensation. The employer can choose to reduce this to as low as 1% in any 2 out of 5 years.
• Employer Non-Elective Contribution: 2% of the employee's compensation. This is an alternative to the match and must be paid for all eligible employees.

These limits are lower than those for 401(k) and SEP IRA plans, which is a key factor to consider when evaluating if a SIMPLE IRA is the right fit.

• Deferral Utilization Score: This gauge shows what percentage of your maximum allowed employee contribution you are making. A score of 100 means you are maxing out your personal deferrals, which is a great way to accelerate your retirement savings by age.
• Contribution Summary: The cards show a clear breakdown of where your annual savings come from: your own contribution, the employer's contribution, and the combined total.
• Projected Balance: This is the calculator's estimate of your SIMPLE IRA's value at your chosen retirement age. Use this as a guidepost to see if you are on track to meet your retirement goals.
• Growth Projection Chart: This visualizes how your savings compound over time. The curve demonstrates the power of consistent contributions and investment returns. A steeper curve indicates more aggressive growth.
• Insights and Comparisons: The insights panel provides actionable advice and compares your SIMPLE IRA projection to what might be possible with a 401(k) or SEP IRA. This is especially important for business owners deciding on the best plan.

If your projected balance is lower than you'd like, consider these strategies:

1. Increase Your Deferral Rate: The most direct way to save more is to increase the percentage of your salary you contribute. Even a 1% or 2% increase can make a large difference over decades.
2. Capture the Full Employer Match: If your employer offers a match, make sure you are contributing at least enough to receive the full amount. Not doing so is like turning down free money.
3. Use Catch-Up Contributions: If you are age 50 or over, take advantage of the additional $3,500 catch-up contribution. This can significantly boost your savings in the critical years before retirement.
4. Review Investment Returns: While you can't control the market, you can control your asset allocation. Ensure your investment mix is appropriate for your age and risk tolerance. A overly conservative portfolio may hinder growth.
5. Evaluate Other Plan Types: If you are consistently maxing out your SIMPLE IRA and want to save more, it may be time for the business to consider upgrading to a 401(k) or, for the self-employed, a SEP IRA or Solo 401(k).

1. Missing the Full Employer Match: Failing to contribute enough to get the maximum employer match is the most common mistake.
2. Ignoring Catch-Up Contributions: Many people over 50 are unaware they can contribute an extra $3,500 per year.
3. Early Withdrawals: Withdrawing money from a SIMPLE IRA within the first two years of participation incurs a steep 25% penalty, on top of regular income tax. This is much higher than the standard 10% early withdrawal penalty.
4. Setting It and Forgetting It: Not periodically increasing your deferral rate as your income grows can leave your savings falling behind your goals.
5. Using it When Another Plan is Better: A high-earning consultant with no employees could likely save far more in a SEP IRA or Solo 401(k) than in a SIMPLE IRA.