IRA Calculator

Calculate your traditional IRA growth and tax benefits for retirement planning

The IRA Calculator helps you estimate the growth of your traditional Individual Retirement Account. Traditional IRAs offer immediate tax deductions on contributions and tax-deferred growth, making them an excellent tool for reducing current taxes while building retirement wealth.

What would you like to calculate?

Current Information

Current Age

Current IRA Balance ($)

Annual Gross Income ($)

Filing Status

Current Tax Bracket (%)

Contribution Information

Annual Contribution ($)

2024 limit: $7,000

Contribution Frequency

Annual Contribution Increase (%)

Investment Information

Expected Annual Return (%)

Historical stock market average: ~10%

Retirement Age

Penalty-free withdrawals start at age 59½

Expected Tax Rate in Retirement (%)

Often lower than current rate due to reduced income

Advanced Options

Adjust for inflation

Include catch-up contributions (age 50+)

Calculate Required Minimum Distributions (RMDs)

Quick Scenarios

IRA Projection

Enter your information to see IRA projection

How Traditional IRAs Work

Traditional IRA Basics

Pre-Tax Contributions: Contributions may be tax-deductible, reducing your current taxable income.

Tax-Deferred Growth: Your investments grow without being taxed until withdrawal.

Taxable Withdrawals: Withdrawals in retirement are taxed as ordinary income.

Required Distributions: You must start taking RMDs at age 73.

Early Withdrawal Penalty: 10% penalty on withdrawals before age 59½ (with some exceptions).

2024 Contribution Limits

Under age 50:$7,000

Age 50 and over:$8,000

Deduction Phase-Out (2024):

Single (with 401k): $77,000 - $87,000

Married Joint (with 401k): $123,000 - $143,000

No workplace plan: Full deduction available

IRA Calculation Formula

Future Value Calculation

FV = PV × (1 + r)^n + PMT × [((1 + r)^n - 1) / r]

FV: Future Value of the IRA

PV: Present Value (current balance)

PMT: Annual contribution amount

r: Annual interest rate (expected return)

n: Number of years until retirement

Tax Benefit Calculation

Annual Tax Savings = Contribution × Current Tax Rate

After-Tax Value = Pre-Tax Balance × (1 - Retirement Tax Rate)

Example: 35-Year-Old Professional

Scenario: Mid-Career Professional

Assumptions

Current Age:35

Annual Contribution:$6,500

Current Tax Bracket:22%

Expected Return:7%

Retirement Age:65

Retirement Tax Rate:18%

Results

Annual Tax Savings:$1,430

Total Contributions:$195,000

Pre-Tax Balance:$1,394,336

After-Tax Value:$1,143,355

Net Tax Benefit:$42,900

Frequently Asked Questions

Can I deduct my traditional IRA contribution?

If you don't have a workplace retirement plan, you can fully deduct your IRA contribution regardless of income. If you do have a 401(k) or similar plan, deductibility phases out at higher income levels. For 2024, the phase-out ranges are $77,000-$87,000 for single filers and $123,000-$143,000 for married filing jointly.

When do I have to start taking money out?

You must begin taking Required Minimum Distributions (RMDs) by April 1st of the year after you turn 73. The amount is calculated based on your account balance and life expectancy. Failing to take RMDs results in a 25% penalty on the amount that should have been withdrawn.

Should I choose traditional or Roth IRA?

Choose traditional IRA if you want an immediate tax deduction and expect to be in a lower tax bracket in retirement. Choose Roth if you expect higher taxes in retirement or want tax-free withdrawals. Young people often benefit more from Roth, while older, high-income earners may prefer traditional.