IRA Calculator
Evaluate whether a Traditional or Roth IRA is better for your situation. Compare pre-tax vs after-tax contributions, see projected balances at retirement, and understand the tax impact based on your current and expected retirement tax brackets.
An Individual Retirement Account (IRA) is a tax-advantaged personal retirement account — separate from any 401(k) at work — that lets you set aside money for retirement and either skip the tax now (Traditional) or skip it later (Roth). For 2025, the contribution limit is $7,000 per year ($8,000 if you're 50 or older). Even modest annual contributions to an IRA, started early, can grow into a six-figure or seven-figure retirement asset.
The choice between Traditional and Roth comes down to one comparison: your marginal tax rate today versus your expected marginal tax rate in retirement. If your retirement rate will be lower, the Traditional deduction now is worth more than the Roth tax-free withdrawal later. If your retirement rate will be higher — or rates rise in general — the Roth wins. The math is exactly identical if rates don't change, which is why so many planners recommend doing some of each.
This calculator projects your IRA balance at retirement using your current balance, annual contributions, expected return, and time horizon, then shows the after-tax result under either Traditional or Roth treatment. The biggest input is time: starting at 25 vs 35 typically doubles the eventual balance for the same monthly contribution.
Inputs
Results
Traditional (Pre-Tax)
$1,127,807
Traditional (After Tax)
$958,636
Roth (Tax-Free)
$1,127,807
Recommendation
Roth IRA may be better since your retirement tax rate is the same or higher
Traditional vs Roth IRA Growth
After-Tax Retirement Value
Year-by-Year Comparison
| Age | Traditional | Roth | Cumulative Tax Savings |
|---|---|---|---|
| 31 | $23,050.00 | $23,050.00 | $1,540.00 |
| 32 | $31,663.50 | $31,663.50 | $3,080.00 |
| 33 | $40,879.95 | $40,879.95 | $4,620.00 |
| 34 | $50,741.54 | $50,741.54 | $6,160.00 |
| 35 | $61,293.45 | $61,293.45 | $7,700.00 |
| 36 | $72,583.99 | $72,583.99 | $9,240.00 |
| 37 | $84,664.87 | $84,664.87 | $10,780.00 |
| 38 | $97,591.41 | $97,591.41 | $12,320.00 |
| 39 | $111,422.81 | $111,422.81 | $13,860.00 |
| 40 | $126,222.41 | $126,222.41 | $15,400.00 |
| 41 | $142,057.97 | $142,057.97 | $16,940.00 |
| 42 | $159,002.03 | $159,002.03 | $18,480.00 |
Formula
How to use this calculator
- Enter your current age and the age you plan to retire. Time horizon is the single most important driver of the final balance.
- Enter your current IRA balance, if any. If you're starting from zero, enter 0 — the calculator will project from contributions alone.
- Enter your planned annual contribution. The 2025 limit is $7,000 ($8,000 if age 50+); the limit applies to combined Traditional + Roth contributions across all your IRAs.
- Enter an expected annual return. 6–8% is a defensible long-term assumption for a diversified portfolio; use lower for bond-heavy allocations.
- Enter your current marginal tax rate — the federal bracket your last dollar of income falls into (10%, 12%, 22%, 24%, 32%, 35%, or 37% in 2025). Add state income tax if applicable.
- Enter your estimated retirement marginal tax rate. Many retirees drop into a lower bracket because earned income stops, but RMDs, Social Security, and pension income can push the rate higher than expected.
- Choose Traditional or Roth to compare. Run both to see the after-tax difference in your specific situation.
- Re-run with a different assumed retirement rate to stress-test. If both come out within a few percent, doing half Traditional and half Roth gives you tax diversification in retirement.
Worked examples
Young saver — 35-year horizon, Roth IRA
Age 30, retiring at 65. $7,000/year contributions, 7% return, current balance $0. Year 35 balance: $7,000 × [(1.07^35 − 1) / 0.07] ≈ $968,000 If Roth: $968,000 tax-free at retirement. If Traditional and the future rate is 22%: $968,000 × 0.78 ≈ $755,000 after tax. The Roth wins by $213,000 — assuming the worker's current marginal rate is lower (e.g., 12%) than the future rate. Early-career low brackets are when Roth pays off most.
Mid-career saver — 20 years, Traditional IRA
Age 45, retiring at 65. Current balance $50,000. $7,000/year contributions, 7% return. Year 20 future value: 50,000 × 1.07^20 + 7,000 × [(1.07^20 − 1) / 0.07] = 193,500 + 287,000 ≈ $480,500 Traditional, retirement rate 18%: $480,500 × 0.82 ≈ $394,000 after tax. Roth, no tax owed: $480,500. But: the Traditional path also gave a $7,000 × 32% = $2,240 tax savings each year for 20 years ($44,800 total), which (if invested in a taxable account) could grow to roughly $80,000–$95,000 after taxes. Total Traditional path: ≈ $474,000–$489,000 after tax. Almost identical to Roth — which is why mid-career savers often do both.
Catch-up contributions at 50+
Age 50, retiring at 67. Current balance $200,000. $8,000/year contributions (including $1,000 catch-up), 7% return. Year 17 future value: 200,000 × 1.07^17 + 8,000 × [(1.07^17 − 1) / 0.07] = 630,800 + 247,400 ≈ $878,200 The catch-up contribution adds about $30,000 to the final balance vs. the $7,000 base limit — meaningful but the existing $200,000 dominates. Anyone over 50 still has 17–20 productive years of compounding ahead and should not skip IRA contributions just because retirement is "close."
When to use this calculator
Use this calculator when deciding whether to open an IRA, which type to contribute to, or how much to contribute each year. It's especially valuable when comparing IRA contributions to other priorities (paying down debt, employer 401(k) match, taxable brokerage), because the after-tax future value lets you compare on equivalent terms.
For most workers, the priority order is: (1) capture the full employer 401(k) match (free money), (2) max the IRA ($7,000/$8,000) — usually Roth if you're in a low bracket, (3) continue 401(k) contributions toward the $23,500 limit, (4) HSA if eligible (uniquely triple tax-advantaged), (5) backdoor Roth if income is too high for direct Roth, (6) taxable brokerage. The IRA fits early in the stack because it's the most flexible account (any custodian, any investment choice).
Pair this with the 401(k) calculator (different limits, different employer-match dynamics), the retirement-savings calculator (whole-portfolio view), and the Roth-vs-Traditional calculator (dedicated tool for that specific comparison). For families above the Roth IRA income limit ($165K single / $246K married in 2025), look into the backdoor Roth conversion strategy.
Common mistakes to avoid
- Skipping IRA contributions because you have a 401(k). IRA contributions are separate from 401(k) limits. You can contribute to both in the same year, and the IRA gives you more investment choice than most workplace plans.
- Missing the contribution deadline. IRA contributions for a tax year can be made up until the tax-filing deadline of the following year (April 15). Many savers miss the boat by waiting until December — even a January contribution counts for the prior year if you tell the custodian.
- Contributing to a Roth IRA above the income limit. The 2025 Roth direct-contribution phase-outs are $150,000–$165,000 (single) and $236,000–$246,000 (married joint). Above the upper bound, contributions are not allowed and create a 6% excise tax until withdrawn or recharacterized.
- Forgetting Required Minimum Distributions (RMDs). Traditional IRA owners must begin RMDs at age 73 (rising to 75 for those born 1960 or later under SECURE 2.0). Roth IRAs have no RMDs for the original owner — a meaningful estate-planning advantage.
- Treating the IRA like an emergency fund. Withdrawals before age 59½ trigger a 10% penalty plus income tax on Traditional distributions. There are exceptions (first home, education, medical), but the default is expensive.
- Not investing the IRA cash. A funded IRA earning 0.01% in a sweep account doesn't compound. After contributing, allocate the money to a long-term index fund or other diversified investment.
Frequently Asked Questions
Sources & further reading
- Individual Retirement Arrangements (IRAs) — overview — U.S. Internal Revenue Service
- IRA Contribution Limits — U.S. Internal Revenue Service
- Publication 590-A — Contributions to IRAs — U.S. Internal Revenue Service