IRA Calculator

Introduction

This IRA Calculator places traditional IRA, Roth IRA, and taxable brokerage outcomes side by side using the same economic dollars where possible. Enter annual contribution, tax rate now, expected tax rate in retirement, return, and years invested. Traditional deferral reduces tax today but withdrawals are taxed later. Roth uses after-tax money and qualified withdrawals are tax-free. Taxable invests after-tax dollars and pays tax on gains along the way. The winner depends on whether your rate drops, stays flat, or rises between contribution and withdrawal.

Who this calculator is for

Anyone choosing among IRA types during tax season or open enrollment spillover after maxing a 401(k). It helps when you know this year's bracket and have a guess at retirement bracket, but want numbers instead of rules of thumb. Dual-income households comparing spousal traditional deductibility also use it before filing.

Employer match stays in the 401(k) Calculator. Roth-only versus taxable detail is in the Roth IRA Calculator. Post-retirement mandatory withdrawals use the RMD Calculator for traditional balances.

What it estimates

Traditional: pretax contribution compounds; ending balance is taxed at retirement rate on withdrawal. Roth: after-tax contribution compounds; ending balance is tax-free if qualified. Taxable: after-tax contribution with ongoing tax drag on returns, then capital gains tax at sale using rates you enter. When traditional and Roth use equivalent out-of-pocket cost, traditional gets a larger starting deposit because of the upfront deduction.

If retirement tax rate is lower than today, traditional often wins on spendable dollars. If rates rise or stay equal, Roth competes or wins. Taxable usually trails for long horizons unless capital gains rates are very low and turnover is minimal. State tax and deductibility phaseouts are not always modeled.

Inputs explained

Use marginal federal rates unless you add state mentally. Contribution should match IRA limit or your planned amount, not 401(k) limit.

• Annual contribution: Dollar amount directed to each path for comparison, often the IRA maximum.
• Current marginal tax rate: Federal rate on the last dollar of income today.
• Retirement marginal tax rate: Expected rate on IRA withdrawals in retirement.
• Expected annual return: Investment return before fees, same for all paths.
• Years until withdrawal: Holding period until retirement spending or conversion.
• Capital gains rate (taxable path): Rate applied to taxable account gains at liquidation.

How to read the results

Compare after-tax spendable amounts, not pretax traditional balance alone. A large traditional number can shrink after 22% or 24% withdrawal tax. Roth after-tax total is directly spendable if qualified. Taxable after-tax total reflects both annual drag and final capital gains.

When traditional beats Roth by a small margin, assumptions dominate. Run retirement rate one bracket lower and one higher. If both flip the winner, your career tax path is uncertain and splitting contributions may be rational.

Worked example

Contribute $6,500 yearly for 30 years at 7% return. Current rate 22%, retirement rate 15%. Traditional accumulates about $661,000 pretax; after 15% tax roughly $562,000 spendable. Roth contributes $6,500 after tax same out-of-pocket as traditional only if you fund traditional with $6,500 pretax and Roth with $6,500 after tax; equivalent Roth out-of-pocket is $5,070 if you only had $6,500 pretax to allocate. Fair comparison often uses $6,500 traditional versus $5,070 Roth after 22% tax on $6,500.

At 15% retirement rate, traditional spendable beats Roth when Roth gets smaller after-tax deposit. If retirement rate is 22% instead of 15%, traditional after-tax falls toward Roth parity. Taxable path with 15% capital gains on gains might finish near $480,000 to $520,000 spendable depending on turnover assumptions, trailing both IRAs.

Practical use cases

Tax season: decide last-minute contribution type before April deadline. Mid-career Roth conversion check: enter conversion amount as lump sum if form allows. Non-deductible traditional IRA before backdoor Roth: taxable path approximates poor traditional choice if gains are taxed heavily.

Coordinate with Tax Calculator for current-year bracket and Retirement Calculator for total nest egg. Article: tax planning strategies 2026.

Limitations and related tools

Required Minimum Distributions, early withdrawal penalties, pro-rata rule on conversions, and deductibility if you have a workplace plan are not fully modeled. Income limits for Roth and deductibility are your responsibility to verify. Future tax law changes are unknown.

Also see Roth IRA Calculator, 401(k) Calculator, Social Security Calculator, RMD Calculator.

How It Works

1. Enter contribution and horizon. Type annual IRA amount and years until retirement withdrawals.
2. Set tax rates. Enter current marginal rate and expected retirement marginal rate.
3. Choose return and taxable gains rate. Use the same return for all paths. Set capital gains rate for taxable account.
4. Compare after-tax totals. Calculate and read spendable amounts for traditional, Roth, and taxable. Stress-test retirement rate up and down.

Formula and methodology

The IRA Calculator uses this identity for the scenario you enter. A bank, payroll system, or tax program may round on a 360-day year or average daily balance, so a statement can differ by a small amount.