IRA Calculator
Compare Traditional vs Roth IRA and project retirement savings.
Result
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The IRA Calculator compares Traditional and Roth IRAs side-by-side, projecting retirement balance and after-tax income. This tool helps you understand tax deferral vs tax-free growth and decide which IRA type best fits your tax situation and retirement goals.
Examples
Young Professional IRA Comparison
A 30-year-old contributing $6,500/year at 7% return with a 22% current tax rate and 15% retirement rate. Traditional IRA grows to ~$1.02M pre-tax ($867K after-tax). The Roth IRA reaches the same balance but all withdrawals are tax-free.
Frequently Asked Questions
Traditional vs Roth IRA: which is better?
If you expect a lower tax rate in retirement, Traditional is usually better because you defer taxes to a lower bracket. If you expect equal or higher rates, Roth wins since withdrawals are tax-free.
What are the IRA contribution limits?
For 2024, the limit is $7,000 per year ($8,000 if you are 50 or older). These limits can change annually with inflation adjustments.
When can I withdraw from an IRA without penalty?
Generally at age 59 and a half. Early withdrawals from a Traditional IRA incur a 10% penalty plus income tax. Roth IRA contributions (not earnings) can be withdrawn penalty-free at any time.
Result
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Quick Tips
- •Traditional IRA is usually better if you expect to be in a lower tax bracket in retirement.
- •Roth IRA is superior if you expect equal or higher tax rates in retirement, as withdrawals are completely tax-free.
- •Max out IRA contributions before investing in taxable accounts; tax-deferred growth is powerful over decades.
- •At age 50, you can contribute an additional $1,000 catch-up contribution to make up for years you couldn't save.
- •Roth conversions (converting Traditional to Roth) can be tax-efficient in low-income years. Consult a tax professional.