🏛️ IRA Calculator
Compare Traditional IRA vs Roth IRA side by side. Estimate future value, tax savings, and retirement income. Understand which account type may be better for your financial situation.
What Is an IRA Calculator?
An IRA (Individual Retirement Account) calculator helps you compare Traditional IRA and Roth IRA accounts side by side. It estimates the future value of your investments, the tax savings (or costs), and the after-tax income you can expect in retirement.
The key difference between these two account types is when you pay taxes:
- Traditional IRA: Contributions are tax-deductible now, but withdrawals are taxed as ordinary income in retirement.
- Roth IRA: Contributions are made with after-tax dollars, but qualified withdrawals in retirement are completely tax-free.
This calculator helps you decide which account type may be better for your specific financial situation.
How Does the IRA Calculator Work?
The calculator projects growth for both IRA types using:
- Current Balance — your existing IRA balance.
- Annual Contribution — the amount you add each year.
- Expected Return — the annual growth rate of your investments.
- Current Tax Rate — your marginal tax rate now (for Traditional IRA tax deduction).
- Retirement Tax Rate — your expected tax rate in retirement (for Traditional IRA withdrawals).
For the Traditional IRA, the calculator shows the tax savings you get each year (contribution × tax rate) and the after-tax value of withdrawals in retirement. For the Roth IRA, it shows the tax cost of contributions (contribution × tax rate) and the tax-free value of withdrawals.
Why Use This IRA Calculator?
- Side-by-Side Comparison: See Traditional and Roth IRAs on the same screen.
- Tax Impact Analysis: Understand the tax savings (Traditional) vs tax cost (Roth) of each account type.
- Detailed Projections: View yearly balances, contributions, and interest earned.
- Visual Chart: Compare the growth of both account types over time.
- Free & Private: No registration, no data storage — all calculations are done in your browser.
❓ IRA Calculator FAQ
What is the difference between a Traditional IRA and a Roth IRA?
Traditional IRA: Contributions are tax-deductible (reducing your taxable income now), but withdrawals in retirement are taxed as ordinary income. Roth IRA: Contributions are made with after-tax dollars (no tax deduction now), but qualified withdrawals in retirement are completely tax-free.
Which IRA is better for me?
It depends on your current and future tax rates. If you expect to be in a higher tax bracket in retirement, a Roth IRA may be better (pay taxes now at a lower rate). If you expect to be in a lower tax bracket in retirement, a Traditional IRA may be better (get a deduction now, pay lower taxes later).
What are the contribution limits for IRAs?
For 2024 and 2025, the IRA contribution limit is $7,000 (or $8,000 if you're age 50 or older). This calculator uses the default of $6,000, but you can adjust it to any amount.
What is the difference between tax-deferred and tax-free growth?
Tax-deferred means you don't pay taxes on investment gains until you withdraw the money (Traditional IRA). Tax-free means you never pay taxes on qualified withdrawals (Roth IRA).
What is the 4% rule and how does it apply to IRAs?
The 4% rule is a guideline for retirement withdrawals. It suggests you can withdraw 4% of your portfolio in the first year of retirement and adjust for inflation each year, with a high probability of not running out of money over a 30‑year retirement.
Can I contribute to both a Traditional IRA and a Roth IRA?
Yes, but the total contribution to all Traditional and Roth IRAs cannot exceed the annual limit ($7,000 in 2024, or $8,000 if age 50+). However, your eligibility for Roth IRA contributions may be limited by your income.
What are the income limits for Roth IRA contributions?
For 2024, the Roth IRA contribution limit begins to phase out at $146,000 (single) and $230,000 (married filing jointly). Above these limits, you cannot contribute directly to a Roth IRA.
How accurate is this calculator?
This calculator provides accurate estimates based on standard financial formulas and tax assumptions. However, actual returns and tax rates vary. Use this as a planning tool and consult a financial advisor for a comprehensive retirement plan.
Is this calculator free to use?
Yes, this calculator is completely free to use. No registration or personal data storage is required. All calculations are performed in your browser.
What is a backdoor Roth IRA?
A backdoor Roth IRA is a strategy for high-income earners to contribute to a Roth IRA when their income exceeds the direct contribution limits. It involves contributing to a Traditional IRA and then converting it to a Roth IRA.