Retirement projections are scenarios, not promises
Quick answer: Compare current savings, contributions, retirement age, inflation and an uncertain investment return. The projection cannot guarantee future income or represent personalized investment advice. Social Security, pension income, taxes, healthcare and withdrawal flexibility must be evaluated separately.
Official 2026 contribution ceilings
| Account / age | 2026 employee limit |
|---|---|
| Most 401(k), 403(b), governmental 457 plans, under 50 | $24,500 |
| Age 50+ ordinary catch-up | $8,000 additional; $32,500 total |
| Age 60, 61, 62 or 63 during 2026 | $11,250 catch-up instead of $8,000; $35,750 total |
| Traditional and Roth IRAs combined, under 50 | $7,500 |
| IRA age 50+ catch-up | $1,100 additional; $8,600 total |
Compensation, income, plan and other restrictions can reduce eligibility. The higher age-60–63 catch-up replaces the ordinary catch-up; do not add both. Employer contributions follow separate limits. Starting in 2026, prior-year wages above $150,000 with the sponsoring employer can trigger Roth catch-up treatment under the applicable rules.
Sources: IRS Notice 2025-67 and IRS catch-up guidance. These limits are not automatic investment recommendations.
Separate real and nominal returns
A nominal balance is expressed in future dollars. A real return adjusts for inflation using (1 + nominal return) / (1 + inflation) - 1. Do not subtract inflation twice, and be explicit whether future contributions rise with wages or remain fixed. Taxes and account restrictions affect spendable retirement income.
Withdrawal-rate uncertainty
A 4% starting withdrawal is a historical planning reference, not a safe guarantee. Fees, tax, sequence of returns, investment mix and a retirement longer than the historical test period affect sustainability. Model lower returns and a longer life, keep contingency reserves and consider professional advice for an actual withdrawal plan.
Explore FIRE scenarios and 2026 contribution rules. Review assumptions at least when work, family, health or market circumstances change.