Traditional IRA Calculator

Traditional IRA contributions are typically tax-deductible now, reducing your taxable income in the year you contribute, but the entire balance (contributions and growth) is taxed as ordinary income when withdrawn in retirement. A Roth IRA works the opposite way, contributions are made with after-tax money, but qualified withdrawals are entirely tax-free.

This calculator projects your pre-tax balance at retirement, shows this year's tax deduction value, and estimates the after-tax amount you'd actually be able to spend once withdrawals are taxed at your expected retirement tax rate.

A Traditional IRA tends to come out ahead if your tax rate in retirement will be lower than it is now, since you get the deduction at today's (higher) rate and pay tax later at a lower one. A Roth tends to come out ahead in the reverse situation. Compare this calculator's after-tax result against our Roth IRA Calculator's tax-free balance to see which fits your situation.

Starting at age 30 with a $10,000 balance, contributing $6,500 a year until retirement at 65, at an expected 7% return, a 24% current tax rate, and a 12% expected retirement tax rate: the pre-tax balance at retirement grows to $1,090,632.76, on $227,500 of contributions. This year's $6,500 contribution is worth $6,500 × 24% = $1,560 in immediate tax savings. At withdrawal, taxed at the lower 12% retirement rate, the after-tax value works out to $1,090,632.76 × (1 − 0.12) = $959,756.83, illustrating why a Traditional IRA tends to come out ahead when your retirement tax rate is lower than your current one.

Note: growth here compounds monthly (not annually), so a 7% annual return behaves like a 7.23% effective annual rate, which is why the balance comes out higher than a simple annual-compounding hand calculation would suggest.