An employer sponsored retirement savings account could be one of your best tools for creating a secure retirement. It provides two important advantages. First, all contributions and earnings are tax-deferred. You only pay taxes on contributions and earnings when the money is withdrawn. Second, many employers provide matching contributions to your account, which can range from 0% to 100% of your contributions. Use this calculator to see how increasing your contributions to a 401(k), 403(b) or 457 plan can affect your paycheck as well as your retirement savings. This calculator has been updated to use the new withholding schedules for 2012.
While this calculator can provide you with some insight, it was developed to be very general and may not fit everyone’s personal situation. Please feel free to contact our office after using this calculator so that we can perform a more thorough analysis.
Single Withholding Rates*
Annual taxable income between these amounts |
Annual withholding |
Withhold additional % of income over this amount |
||
$0.00 |
$2,150.00 |
$0.00 |
|
|
$2,150.00 |
$10,850.00 |
$0.00 |
plus 10% of income over $2,150.00 |
|
$10,850.00 |
$37,500.00 |
$870.00 |
plus 15% of income over $10,850.00 |
|
$37,500.00 |
$87,800.00 |
$4,867.50 |
plus 25% of income over $37,500.00 |
|
$87,800.00 |
$180,800.00 |
$17,442.50 |
plus 28% of income over $87,800.00 |
|
$180,800.00 |
$390,500.00 |
$43,482.50 |
plus 33% of income over $180,800.00 |
|
$390,500.00 |
(no limit) |
$112,683.50 |
plus 35% of income over $390,500.00 |
|
Married Withholding Rates*
Annual taxable income between these amounts |
Annual withholding |
Withhold additional % of income over this amount |
||
$0.00 |
$8,100.00 |
$0.00 |
|
|
$8,100.00 |
$25,500.00 |
$0.00 |
plus 10% of income over $8,100.00 |
|
$25,500.00 |
$78,800.00 |
$1,740.00 |
plus 15% of income over $25,500.00 |
|
$78,800.00 |
$150,800.00 |
$9,735.00 |
plus 25% of income over $78,800.00 |
|
$150,800.00 |
$225,550.00 |
$27,735.00 |
plus 28% of income over $150,800.00 |
|
$225,550.00 |
$396,450.00 |
$48,665.00 |
plus 33% of income over $225,550.00 |
|
$396,450.00 |
(no limit) |
$105,062.00 |
plus 35% of income over $396,450.00 |
|
While your plan may not have a deferral percentage limit, this calculator limits deferrals to 80% to account for FICA (Social Security and Medicare) taxes. Please note that your plan’s contributions may be limited to less than 80% of your income. Check with your plan administrator for details. For 2012 the maximum contribution to a 401(k), 403(b) or 457 is $17,000 per year for individuals under 50 and $22,500 for individuals age 50 and over.
It is important to note that some employees are subject to another form of contribution limitations. Employees classified as “Highly Compensated” may be subject to contribution limits based on their employer’s overall participation. If you expect your salary to be $115,000 or more in 2012 or was $110,000 or more in 2011, you may need to contact your employer to see if these additional contribution limits apply to you.
Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.
Calculators are provided by an independent third party and are being made available to you as self-help tools for your independent use and are not intended to provide investment advice or be representative of actual results. We do not guarantee their applicability or accuracy in regards to your individual circumstances. The determinations made by these calculators should not be construed as guarantees or projections. Moreover, the reasonableness of certain information may change over time because of changes in tax law, investment trends and your personal circumstances. The information contained here is based on current law and has been obtained from sources believed to be reliable, but we do not guarantee its accuracy. Investment results can vary considerably depending on the type of securities involved, general market conditions and other factors. It is important that you periodically review and update your plans. Raymond James does not provide tax or legal advice. You should contact your tax or legal advisor concerning your particular situation. All investments carry a degree of risk, and past performance is not a guarantee of future results.