GlenCalc

IRA calculator

A traditional IRA lets contributions grow tax-deferred; you pay income tax when you withdraw. Enter your contributions and tax rates to see the balance and what it is worth after tax.

IRA limits change each year; check the IRS.

Your answer

IRA balance at retirement$644,046.65
After tax on withdrawal$547,439.66
Same savings in a taxable accountGrowth taxed each year at today’s rate$500,351.33

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How we worked it out

Updated as you change the numbers.

  1. $7,000.00 a year (at the start of each year) for 30 years at 6% grows to $644,046.65.
  2. After 15% tax on withdrawal: $547,439.66.

Method and assumptions

Contributions are made at the start of each year and grow at the return with no tax until withdrawal, when the whole balance is taxed as income at your retirement rate. For comparison, the taxable account invests the same amount but loses part of each year’s growth to tax. Deduction eligibility, contribution limits and required distributions are set by the IRS.

Questions

Is a traditional or Roth IRA better?

If you expect a lower tax rate in retirement than now, a traditional IRA usually comes out ahead; if higher, a Roth. Compare them on the Roth IRA calculator.

Sources

Method and figures checked on . Every worked answer on this page is covered by an automated test. Found a mistake? Tell us.

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