An Independent Calculator · For ASRS MembersIssue 2026.01 · Arizona Edition
AZ
Maximize Your ASRS Pension with Compound Interest
A calculator built specifically for Arizona educators in Phoenix, Tucson, and Mesa. Plan your 403(b) or IRA supplement alongside your ASRS pension benefits.
01.
2.5%
AZ State Income Tax
02.
$23,000
2024 403(b) Limit
03.
ASRS
Pension System
§ 01 — The Calculator
Run your projection
Defaults are set for a typical Arizona teacher's 403(b) supplement. Adjust each input to match your situation, then calculate.
$
Starting balance in your 403(b) or IRA
$
$400 = $4800/yr
%
yrs
%
%
Assumes national average inflation of ~3%
%
Arizona tax rate: up to 2.5%
§ 03 — The Output
After — years
Arizona Reality: With state income tax up to 2.5%, pre-tax 403(b) contributions are especially powerful for ASRS members — every dollar you defer saves you both federal AND state taxes immediately.
Total Portfolio Value
—
Nominal future value
Total Principal
—
Out-of-pocket contributions
Real Purchasing Power
—
In today's dollars
Compound Gain—
Effective Rate—
Doubles In—
Total Interest—
Growth chart
Year-by-year breakdown
Year
Monthly
Deposited
Portfolio
Gain
Real Value
§ 04 — Essay
How Arizona Teachers Can Strengthen Their ASRS Pension with Compound Interest
If you're an educator in Arizona, the Arizona State Retirement System (ASRS) forms the bedrock of your retirement security. But like most state pension systems, ASRS alone rarely replaces 100% of your pre-retirement income. Whether you teach in Phoenix, Tucson, and Mesa, understanding how compound interest in a 403(b) can supplement your pension is one of the most important financial decisions of your career.
The Retirement Gap in Arizona: A ASRS pension that replaces approximately 60% of your final salary still leaves a meaningful gap — especially as healthcare costs rise 5–7% annually. For teachers in Phoenix and Tucson, a 403(b) powered by compound interest is the most reliable way to close that gap.
§ 05 — Common Questions
Frequently asked
Is ASRS alone enough for retirement in Arizona?
For most Arizona teachers, ASRS replaces about 50–65% of final salary. Comfortable retirement typically requires 70–90%, so a 403(b) supplement closes that gap.
Are Arizona teachers covered by Social Security?
Yes (covered). This affects how much you should contribute to a 403(b) — uncovered teachers should generally save more.
Can I contribute to a 403(b) and an IRA?
Yes — they have separate limits ($23,000 for 403(b) and $7,000 for IRA in 2026, with catch-up amounts at 50+). Many teachers use both.
What happens to my 403(b) if I move out of state?
Your 403(b) is portable and yours regardless of where you live. You can roll it into an IRA when you separate from your district.
How does Arizona's 2.5% state tax affect my withdrawals?
Traditional 403(b) withdrawals are taxed as ordinary income in Arizona. Some states offer partial exemptions for retirement income — check current Arizona rules.