Many of us know that saving for retirement is wise, but here are key figures that can help you picture your retirement benefits.

Contribution Limits

Workers can contribute up to $24,500 in a 457(b), 403(b), or 401(k) plan in 2026. Participants 50 and over in these plans can save an extra $8,000, or a total of $32,500.

Super Catch-Up Contributions

Employers now have the option of allowing even larger catch-up contributions to 457(b), 403(b), and 401(k) plans for workers aged 60 to 63. These catch-up contributions for 2026 are as much as $11,250, for a total of $35,750 in a plan.

Income Replacement Rate

Already retired? Once you’re retired, some of your expenses may disappear. The income replacement rate suggests retirees will need to replace 70% to 80% of their preretirement income to maintain their lifestyle.

Health Care Costs

This is one expense that doesn’t typically go down in retirement. People aged 65 and older spent an average of $8,027 on health care in 2023, according to the Bureau of Labor Statistics.* Get your estimate.

The 4% Rule

This popular rule was designed to determine how much you can safely withdraw from your nest egg each year without running out of money during a 30-year retirement. You withdraw 4% in the first year, and every year thereafter, you increase the dollar amount of your withdrawal based on the previous year’s inflation. So, if you have $750,000 in savings, you can withdraw $30,000 the first year. If inflation rises 3%, next year’s withdrawal goes up to $30,900.

The 25x Expenses Rule

It’s the flip side of the 4% rule and can help you set a retirement savings goal. Add up your expected annual expenses in retirement and subtract any anticipated yearly payments from Social Security or a pension. Then multiply the result by 25. For example, say after Social Security and pension payments, you’ll still need $30,000 to meet annual living expenses in retirement. So, $30,000 x 25 = $750,000 — your estimated savings goal.

Social Security at 62, 67, and 70

Retirement benefits can start at 62, but the earlier you claim them, the smaller your monthly payment. At 62, your benefit will be reduced by as much as 30% compared with waiting until your full retirement age — 67 for those born in 1960 or later. And for every year you wait beyond your full retirement age until age 70, your benefit will increase by 8%.

Required Minimum Distributions

Eventually, you must start taking RMDs from your 457(b), 403(b), or 401(k) plan, so the government can start collecting taxes on the money. RMDs begin at age 73 for those born between 1951 and 1959, and at age 75 for those born in 1960 or later. As a reminder, Roth balances are not subject to RMDs.

Disclosure

^{*Quick Calculator Benefit Estimates,” Social Security Administration, April 28, 2025.}

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