IRA Calculator
Compare Traditional and Roth IRAs to find the best retirement savings strategy for you
2024-2025 IRA Contribution Limits
See which IRA type gives you more money at retirement based on your situation.
How to Use This IRA Calculator
- Enter your current age and planned retirement age
- Input your annual IRA contribution (2026 limit: $7,000 under 50, $8,000 if 50+)
- Select your expected annual return rate (6-8% is reasonable for long-term planning)
- Enter your current marginal tax rate and expected retirement tax rate
- Compare Traditional vs Roth IRA results to see which gives you more after-tax wealth
Example: Age 30, retiring at 65, contributing $7,000/year at 7% return: Both IRAs grow to $1.03 million. But if you're in the 24% bracket now and expect 22% in retirement, Traditional IRA wins. If you expect higher taxes in retirement, Roth wins.
Tip: Your current vs. future tax rate is the key decision factor. When in doubt, contribute to both for tax diversification.
Why Use a IRA Calculator?
Choosing between Traditional and Roth IRAs can mean tens of thousands of dollars in difference at retirement. This calculator quantifies that decision.
- Determine which IRA type maximizes your after-tax retirement wealth
- See the impact of contributing the maximum vs. a lower amount
- Compare outcomes if tax rates increase or decrease in retirement
- Calculate growth for existing IRA balances plus new contributions
- Understand the tax savings from Traditional IRA deductions vs. Roth tax-free growth
- Plan contribution strategy as your income and tax bracket change over your career
Understanding Your Results
The winner depends almost entirely on your current tax rate versus your expected retirement tax rate.
| Result | Meaning | Action |
|---|---|---|
| Current rate higher than retirement rate | Traditional IRA likely wins | You benefit from the deduction now at a higher rate than you'll pay on withdrawals. |
| Current rate equals retirement rate | Roughly equivalent | Roth provides flexibility with no RMDs. Traditional gives immediate tax savings. |
| Current rate lower than retirement rate | Roth IRA likely wins | Pay taxes at today's lower rate. All growth and withdrawals are tax-free. |
| Uncertain about future rates | Tax diversification recommended | Split contributions between Traditional and Roth for flexibility. |
Meaning: Traditional IRA likely wins
Action: You benefit from the deduction now at a higher rate than you'll pay on withdrawals.
Meaning: Roughly equivalent
Action: Roth provides flexibility with no RMDs. Traditional gives immediate tax savings.
Meaning: Roth IRA likely wins
Action: Pay taxes at today's lower rate. All growth and withdrawals are tax-free.
Meaning: Tax diversification recommended
Action: Split contributions between Traditional and Roth for flexibility.
Note: This comparison assumes you invest the tax savings from Traditional IRA contributions. If you spend those savings, Roth often wins.
About IRA Calculator
Formula
Future Value = Annual Contribution × [((1 + r)^n - 1) / r] For Traditional, multiply final balance by (1 - retirement tax rate). Roth balance is fully available tax-free. This comparison reveals the true after-tax difference.
Current Standards: 2026 IRA limits: $7,000 under 50, $8,000 age 50+. Roth income limits: $146,000-$161,000 (single), $230,000-$240,000 (MFJ) for phaseout. RMDs (Required Minimum Distributions) begin at age 73 for Traditional but don't apply to Roth.
Frequently Asked Questions
What if I exceed Roth IRA income limits?
You can use the 'backdoor Roth' strategy: contribute to a Traditional IRA (non-deductible), then convert to Roth. The conversion is taxable only on any gains. This is legal and commonly used by high earners. Be aware of the pro-rata rule if you have other Traditional IRA balances.
Can I contribute to both an IRA and a 401(k)?
Yes! They have separate limits. Max both if possible: $23,500 to 401(k) plus $7,000 to IRA in 2026. However, your Traditional IRA deduction may be limited if you're covered by a workplace plan and your income exceeds certain thresholds ($77,000-$87,000 single, $123,000-$143,000 married).
Why doesn't the Roth IRA have required minimum distributions?
Roth IRAs are funded with already-taxed money, so the government has no claim on the balance. You can let it grow indefinitely, pass it to heirs, or withdraw as needed. This makes Roth IRAs valuable for estate planning and provides flexibility in managing retirement income and taxes.
Should I convert my Traditional IRA to Roth?
Conversions can make sense in low-income years (job transition, early retirement before Social Security), when tax rates are temporarily low, or if you expect higher future rates. You'll pay taxes on the conversion amount at your current rate. Spread large conversions over multiple years to avoid jumping brackets.
What happens if I withdraw from an IRA early?
Withdrawals before age 59½ generally incur a 10% penalty plus income tax. Exceptions include: Roth contributions (not earnings) can be withdrawn anytime; first-time home purchase ($10,000 lifetime); qualified education expenses; disability; substantially equal periodic payments. Roth earnings have a 5-year holding requirement.