SIMPLE IRA Calculator

Use this calculator to project a SIMPLE IRA balance with employee and employer contributions.

What this calculator does

The SIMPLE IRA calculator estimates retirement balance from employee contributions, employer contributions, and investment growth. It supports 3% matching and 2% non-elective employer contribution methods.

It uses:

• current age and retirement age
• annual salary
• employee contribution
• employer contribution type

SIMPLE IRA Formula

FV = P(1 + r)^n + PMT × (((1 + r)^n - 1) / r)

Where:

• P = current SIMPLE IRA balance
• PMT = annual employee and employer contributions
• r = annual return
• n = years until retirement

Example calculation

If:

• Salary = 80,000
• Employee contribution = 10,000
• Employer match = 3%
• Employer contribution = 2,400

Then:

• Annual additions = 12,400
• Contributions compound each year
• Existing balance also grows
• Total growth depends on return and time

The SIMPLE IRA grows from both employee and employer contributions.

What is a SIMPLE IRA?

A SIMPLE IRA is a retirement plan for small employers. Employees can defer salary, and employers generally make matching or non-elective contributions.

Why SIMPLE IRA planning matters

• estimates long-term account growth
• values employer contributions
• helps set employee deferrals
• supports small business retirement planning

When to use this calculator

• projecting SIMPLE IRA balance
• comparing employer contribution methods
• choosing employee contribution amounts
• reviewing small business plan value

Common mistakes

• missing employer contribution rules
• ignoring contribution limits
• confusing match and non-elective contributions
• assuming salary never changes

SIMPLE IRA vs SEP IRA

SIMPLE IRA allows employee salary deferrals and employer contributions. SEP IRA is generally employer-funded only.

The best choice depends on business size and contribution goals.

FAQs

What is a SIMPLE IRA?

A SIMPLE IRA is a small-employer retirement plan with employee deferrals and employer contributions.

How do you calculate SIMPLE IRA growth?

Project current balance plus annual employee and employer contributions using compound growth.

What is a good SIMPLE IRA contribution?

A good contribution captures employer benefits and stays within annual limits.

What is the difference between SIMPLE IRA and SEP IRA?

SIMPLE includes employee deferral. SEP is usually employer contribution only.