Question 1

How much do I need to retire?

Accepted Answer

Multiply your expected annual retirement expenses by 25. This is based on the 4% safe withdrawal rate. For example, $60,000/year in expenses requires a $1,500,000 portfolio. Subtract guaranteed income like Social Security before calculating — if you expect $24,000/year from Social Security, you only need to fund $36,000/year from savings, requiring a $900,000 portfolio.

Question 2

What is the 4% rule for retirement?

Accepted Answer

The 4% rule states you can withdraw 4% of your portfolio in year one of retirement, adjust for inflation each year, and your money should last 30+ years in most historical market scenarios. It originated from the 1998 Trinity Study. For retirements longer than 30 years, a 3.5% withdrawal rate is considered safer.

Question 3

When should I claim Social Security?

Accepted Answer

Claiming at 70 vs 62 increases your monthly benefit by approximately 77%. The break-even point — where delaying pays off — is typically around age 78-80. If you expect to live past 80 and have other income to bridge the gap, delaying to 70 is usually the better financial choice. For married couples, the higher earner should generally delay to maximize the survivor benefit.

Question 4

How much should I have saved for retirement by age?

Accepted Answer

According to Federal Reserve data, US median retirement savings by age are approximately: age 35: $45,000; age 40: $93,000; age 45: $145,000; age 50: $203,000; age 55: $290,000; age 60: $368,000. A common benchmark is to have 1x your salary saved by 30, 3x by 40, 6x by 50, and 10x by retirement.

Question 5

What is a Monte Carlo simulation for retirement?

Accepted Answer

A Monte Carlo simulation runs your retirement plan through thousands of randomly generated market scenarios to show the probability your savings will last. Instead of assuming average returns every year, it models the full range of possible outcomes including bad sequences of returns. A success rate above 90% is considered very safe; above 80% is generally acceptable.

Question 6

What are the 401k contribution limits for 2026?

Accepted Answer

For 2026, the 401k employee contribution limit is $23,500 (under age 50) or $31,000 (age 50+). Workers aged 60-63 can contribute up to $34,750 under the new super catch-up provision. The IRA contribution limit is $7,000 ($8,000 if 50+). The HSA limit is $4,300 for individuals and $8,550 for families.

Question 7

How does inflation affect retirement savings?

Accepted Answer

At 3% annual inflation, your purchasing power is cut in half every 24 years. For a 30-year retirement, $60,000 in expenses today would cost over $145,000 in year 30. To protect against inflation: stay invested in stocks throughout retirement, delay Social Security to maximize COLA-adjusted benefits, consider TIPS bonds, and use a realistic 2.5-3% inflation assumption in your retirement calculator.

Question 8

Can I retire at 55?

Accepted Answer

Yes, retiring at 55 is achievable but requires more savings than a traditional retirement. With a 40-year retirement horizon, use a 3.5% withdrawal rate (28-30x annual expenses instead of 25x). Key challenges: no Medicare until 65 (budget $800-1,500/month for health insurance), no Social Security until 62 at earliest, and no penalty-free 401k access until 59.5 (except via the Rule of 55 for your current employer's plan).

Account	Under 50	Age 50+	Age 60–63	Notes
401(k) / 403(b) / 457(b)	$23,500	$31,000	$34,750	Employee elective deferral limit
Traditional IRA	$7,000	$8,000	$8,000	Deduction phases out if covered by workplace plan
Roth IRA	$7,000	$8,000	$8,000	Income limits: $150K single / $236K married phase-out
SEP IRA	$70,000	$70,000	$70,000	Up to 25% of compensation; no catch-up
SIMPLE IRA	$16,500	$20,000	$21,750	Employer must match 3% or contribute 2%
HSA (Individual)	$4,300	$5,300	$5,300	Must have qualifying HDHP; $1,000 catch-up at 55+
HSA (Family)	$8,550	$9,550	$9,550	Must have qualifying HDHP; $1,000 catch-up at 55+
401(k) Total (incl. employer)	$70,000	$77,500	$81,250	Combined employee + employer contributions (Section 415)

Account / Benefit	Income Phase-Out (MAGI)	If Over Limit
Roth IRA (Single)	$150,000 – $165,000	Use backdoor Roth if over limit
Roth IRA (Married)	$236,000 – $246,000	Use backdoor Roth if over limit
Traditional IRA Deduction (Single, covered by plan)	$79,000 – $89,000	Can still contribute; just not deductible
Traditional IRA Deduction (Married, covered by plan)	$126,000 – $146,000	Can still contribute; just not deductible
Saver's Credit (Single)	AGI up to $38,250	10–50% credit on first $2,000 contributed
Saver's Credit (Married)	AGI up to $76,500	10–50% credit on first $4,000 contributed

Year	401(k)	IRA	HSA (Ind.)	HSA (Fam.)
2020	$19,500	$6,000	$3,550	$7,100
2021	$19,500	$6,000	$3,600	$7,200
2022	$20,500	$6,000	$3,650	$7,300
2023	$22,500	$6,500	$3,850	$7,750
2024	$23,000	$7,000	$4,150	$8,300
2025	$23,500	$7,000	$4,300	$8,550
2026	$23,500	$7,000	$4,300	$8,550

2026 Retirement Contribution Limits

Income Limits & Phase-Outs (2026)

How Limits Have Changed (2020–2026)