Retirement Deferral Optimizer — Dodge Tax Cliffs, Not Brackets

You required

Filing status

Kids under 17 (for CTC)

Your age (end of 2026)

Spouse's age

State of residence

Which plan will the extra deferrals go into? 🏥 On an ACA marketplace health plan (with subsidy)

Your 2026 income required

Gross wages ($/yr) — before any retirement deferrals. Combined for both spouses if filing jointly. Pre-tax retirement contributions you're already making ($/yr, household total — 401k/403b/457/TSP, not IRA) Other ordinary income ($/yr) — interest, side gigs, rental profit, etc.

⚙️ More detail — investments, Social Security, muni interest

Qualified dividends + long-term capital gains ($/yr, household) Social Security benefits ($/yr, household) — for working-while-collecting households Tax-exempt (muni) interest ($/yr) — untaxed, but counts toward IRMAA & SS taxation

Enter full-year estimates. The calculator applies the 2026 standard deduction ($16,100 single / $32,200 joint, plus 65+ extras) for you — don't subtract it yourself. Itemizers: your bill will differ a bit, but the savings per deferred dollar (the point of this tool) barely changes.

The extra deferral the decision

Additional amount to defer in 2026 ($, on top of what you already contribute)

Or aim at a cliff — defer just enough to duck under the…

These buttons are the whole point: they compute the exact deferral that pulls your income back under each cliff you're currently over (or about to cross). A cliff button disappears when it doesn't apply to you.

What this deferral saves you — this year

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Federal tax saved

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State tax saved

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Savings on the LAST dollar

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Your MAGI after deferring

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Cliffs ducked

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Worth at retirement

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🧗 Your cliff radar

Cliffs are where $1 of income flips a binary switch — unlike brackets, which only change the rate on dollars above the line. ✅ = safely under · ⚠️ = within deferral range · ❌ = over the line (the "defer to duck" column shows the fix) · 🏆 = your chosen deferral gets you under.

Savings on each deferred dollar

The green curve is the combined federal + state savings rate on each additional deferred dollar. Flat stretches are your bracket rate; spikes are cliffs being crossed — the Child Tax Credit staircase ($50 back per $1,000), Saver's Credit tiers, NIIT relief, capital-gains un-stacking. Gold verticals mark the big binary cliffs (Roth eligibility, IRMAA).

📈 Compound the savings

Years until retirement

Expected annual return (%)

Honesty corner: pre-tax deferrals aren't tax-free, they're tax-deferred — you'll owe ordinary income tax when the money comes out. The lines above only count the parts that are genuinely yours to keep: this year's tax savings (invested), and the compounding head start. Weighing pre-tax vs Roth for the deferrals themselves? That's myrothcalc.com's department.

Good-to-know moves

The bracket myth, once and for all: US brackets are marginal — "dropping into the 22% bracket" only changes the rate on the dollars above the line, not your whole bill. If someone tells you to defer to "get into a lower bracket," they're chasing pennies. Cliffs are where the dollars are.
Match first, always. Employer match is an instant 25–100% return — capture every match dollar before optimizing anything else. (Our match calculator checks you're not leaving any behind.)
An HSA is a stealth deferral: contributions reduce AGI/MAGI for every cliff on the radar AND skip FICA when made through payroll — $4,400 self / $8,750 family (+$1,000 at 55+) of extra room if you're on an HDHP.
Have a 457(b)? It has its own separate limit — $24,500 on top of your 401(k)/403(b) limit — and uniquely, 457 money comes out penalty-free at any age once you leave the employer. Government/school households can defer double what everyone else can.
Pennsylvania and New Jersey players, read the fine print: PA gives no state deduction for any elective deferrals (they're taxed going in, tax-free coming out). NJ deducts 401(k) contributions but not 403(b) or 457. The state savings box already accounts for this.
Deferrals reduce your W-2 Box 1, not your FICA wages — Social Security/Medicare tax still applies. Only HSA payroll contributions dodge FICA.
Changed your deferral mid-year? Re-check your W-4 — a big deferral change can leave your withholding badly over- or under-set. Our W-4 planner trues it up in five minutes.
The Saver's Credit is non-refundable — it can only erase tax you actually owe. The radar accounts for that, but at very low incomes the headline credit may exceed what's usable.
MAGI ≈ AGI for almost everyone. The cliffs formally use "modified" AGI, but the modifications (foreign income exclusion, etc.) don't apply to most households. If they apply to you, you already know it.

🧰 How much room do you have? 2026 limits

Per person, verified against IRS Notice 2025-67:

Account	Base limit	Age 50+ catch-up	Age 60–63 "super"
401(k) / 403(b) / TSP (combined)	$24,500	+$8,000	+$11,250 (replaces the $8,000)
457(b) — a separate limit on top	$24,500	+$8,000	+$11,250
IRA (traditional + Roth combined)	$7,500	+$1,100	—
HSA (self / family)	$4,400 / $8,750	+$1,000 at 55+	—

Wages over $150,000 in 2025? The SECURE 2.0 mandate says your 401(k)/403(b) catch-up contributions must now be Roth (post-tax) — the base $24,500 can still be pre-tax. Roth catch-ups don't reduce AGI, so they don't help duck cliffs.