IRA Calculator

The IRA calculator can be used to evaluate and compare Traditional IRAs, SEP IRAs, SIMPLE IRAs, Roth IRAs, and regular taxable savings. For comparison purposes, Roth IRA and regular taxable savings will be converted to after-tax values. To calculate Roth IRA with after-tax inputs, please use our Roth IRA Calculator. This calculator is mainly intended for use by U.S. residents.

Current Balance
Annual Before
Tax Contribution
Investment Return
Current Age
Retirement Age
Current Marginal
Tax Rate
Marginal Tax Rate
in Retirement
Inflation Rate

Result

 Traditional,
SIMPLE,
or SEP IRA
Roth IRARegular Taxable Savings
Balance at Age 65$766,613$574,960$406,184
Balance at Age 65 (After Tax)$651,621$574,960$406,184
Equivalent Today's Purchasing Power$231,575$204,331$144,351

A Traditional, SIMPLE, or SEP IRA account can accumulate $76,661 more after tax balance than a Roth IRA account at age 65. A Roth IRA account can accumulate $168,776 more than a regular taxable savings account.

Balance Accumulation Graph

Annual Schedule

 Traditional/SIMPLE/SEP IRA (Before Tax)Traditional, SIMPLE, or SEP IRA (After Tax)Roth IRA (After Tax)Regular Taxable Savings (After Tax)
AgeStartEndStartEndStartEndStartEnd
30$20,000$26,700$17,000$22,695$15,000$20,025$15,000$19,800
31$26,700$33,802$22,695$28,732$20,025$25,352$19,800$24,816
32$33,802$41,330$28,732$35,131$25,352$30,998$24,816$30,058
33$41,330$49,310$35,131$41,913$30,998$36,982$30,058$35,535
34$49,310$57,769$41,913$49,103$36,982$43,326$35,535$41,259
35$57,769$66,735$49,103$56,724$43,326$50,051$41,259$47,241
36$66,735$76,239$56,724$64,803$50,051$57,179$47,241$53,492
37$76,239$86,313$64,803$73,366$57,179$64,735$53,492$60,024
38$86,313$96,992$73,366$82,443$64,735$72,744$60,024$66,850
39$96,992$108,311$82,443$92,065$72,744$81,233$66,850$73,983
40$108,311$120,310$92,065$102,264$81,233$90,233$73,983$81,438
41$120,310$133,029$102,264$113,074$90,233$99,771$81,438$89,227
42$133,029$146,510$113,074$124,534$99,771$109,883$89,227$97,368
43$146,510$160,801$124,534$136,681$109,883$120,601$97,368$105,874
44$160,801$175,949$136,681$149,557$120,601$131,962$105,874$114,763
45$175,949$192,006$149,557$163,205$131,962$144,004$114,763$124,053
46$192,006$209,026$163,205$177,672$144,004$156,770$124,053$133,760
47$209,026$227,068$177,672$193,008$156,770$170,301$133,760$143,904
48$227,068$246,192$193,008$209,263$170,301$184,644$143,904$154,505
49$246,192$266,463$209,263$226,494$184,644$199,848$154,505$165,583
50$266,463$287,951$226,494$244,759$199,848$215,963$165,583$177,159
51$287,951$310,728$244,759$264,119$215,963$233,046$177,159$189,256
52$310,728$334,872$264,119$284,641$233,046$251,154$189,256$201,898
53$334,872$360,464$284,641$306,395$251,154$270,348$201,898$215,108
54$360,464$387,592$306,395$329,453$270,348$290,694$215,108$228,913
55$387,592$416,348$329,453$353,896$290,694$312,261$228,913$243,339
56$416,348$446,829$353,896$379,804$312,261$335,121$243,339$258,414
57$446,829$479,138$379,804$407,268$335,121$359,354$258,414$274,168
58$479,138$513,387$407,268$436,379$359,354$385,040$274,168$290,631
59$513,387$549,690$436,379$467,236$385,040$412,267$290,631$307,834
60$549,690$588,171$467,236$499,946$412,267$441,128$307,834$325,811
61$588,171$628,962$499,946$534,617$441,128$471,721$325,811$344,598
62$628,962$672,199$534,617$571,369$471,721$504,149$344,598$364,230
63$672,199$718,031$571,369$610,326$504,149$538,523$364,230$384,745
64$718,031$766,613$610,326$651,621$538,523$574,960$384,745$406,184

RelatedRetirement Calculator | Roth IRA Calculator | Annuity Payout Calculator


In the United States, an IRA (individual retirement account) is a type of retirement plan with taxation benefits defined by IRS Publication 590. Among the different IRAs, the most common are traditional IRAs and Roth IRAs. The contributions to a Roth IRA are not tax deductible, yet the withdrawals after retirement are tax-free. On the opposite, the contributions to Traditional IRA are tax deductible, yet taxed on withdrawals after retirement. For most people, their expected marginal tax rates after retirement will be lower. As a result, they may find that traditional IRAs are more financially beneficial, simply because taxation occurs in retirement and not during prime working years. Both accumulate more wealth than regular taxable savings or investments due to the presence of tax shields. SEP (Simplified Employee Pensions) IRAs are popular with self-employed contractors with a handful of employees, and SIMPLE IRAs are designed for small businesses with less than 100 employees.

There are several types of IRAs:

Traditional IRA

As the most common IRA in use, traditional IRAs are qualified retirement plans that have tax shields in place for funds set aside for retirement. Taxation only occurs when withdrawing before or in retirement. However, early withdrawals will be penalized, except in qualified cases. The contributions made are tax-deductible for most people if several requirements are met, which depend on tax-filing status and gross income. After age 59 ½, withdrawals from traditional IRAs are penalty-free. Traditional IRA withdrawals are not required until after age 70 ½, when it becomes mandatory to take the required minimum distribution (RMD).

Roth IRA

Often initiated and managed by individuals, contributions come from after-tax income or assets. Investment income is tax-free and the withdrawals are tax-free. After turning age 59 ½, withdrawals from Roth IRAs are penalty-free. However, Roth IRA withdrawals are not mandatory during the owner's lifetime. In essence, Roth IRAs can grow tax-free throughout the owner's entire lifetime without distribution, which is a requirement of traditional IRAs . For more detailed information and to do calculations involving Roth IRAs, visit our Roth IRA Calculator.

SEP IRA

Simplified Employee Pension IRAs, which are initiated by employers, allow them to make contributions to the IRA accounts of their employees. SEP IRAs are mostly used by small businesses or self-employed individuals, so they are designed to be relatively easier to set up. They function similarly to traditional IRAs in tax treatment, balance accumulation, and distribution. Employers may deduct contributions as business expenses. Contribution limits for these are different from the more popular IRAs above; for 2017, the limit is the lesser of 25% of gross income, or $54,000. This is almost ten times the amount of the more popular traditional or Roth IRAs. All proceeds are immediately 100% vested. There is no catch-up contribution for account holders age 50 or older.

SIMPLE IRA

Savings Incentive Match Plan for Employee IRAs are generally designed for small businesses of 100 or fewer employees. Employers may deduct contributions as business expenses. For this retirement plan, employers must choose between two matching options for their employees. The first is a match of employee's contributions up to 3% of their compensation. The second is a fixed rate of 2% of every employee's compensation, regardless whether they participate. In both cases, annual contribution limits are $12,500 (additional $3,000 for employees over 50) or 100% of compensation. If an employee is simultaneously involved in other employer plans, total of all contributions cannot exceed $18,000. All proceeds are immediately 100% vested.

IRA Rollovers

Existing qualified retirement plans, such as 401(K)s, 403(B)s, SIMPLE IRAs, or SEP IRAs can be "rolled over" and consolidated into a traditional IRA. Many other plans, including 457 plans or inherited employer-sponsored plans (for designated beneficiaries) can also be rolled over. There are no taxes due when rolling over company plans directly into IRAs. However, remember to report all rollovers on tax returns, even when no taxes are due. Two IRS forms are involved here: 1099R to report distributions received from employer's plans, and 5498 to report rollover contributions to IRA. In most cases, variety of choices in investments remain about the same after rollovers into new IRAs. Rollovers and contributions can be combined into the same IRA, but traditional IRA and Roth IRA funds must be kept in separate accounts.

Remember that there are other options available for consideration regarding retirement plans rather than rolling them into IRAs, and all have their advantages and disadvantages. Some people choose to leave accumulated assets in former employer's plans, even after ties are cut (plans that require certain minimum amounts will not allow this). Others move the assets into new employer's plans, and both actions are possible given that the plans allow them. Last but not least, it is also possible to cash out retirement plans, though this usually results in early withdrawal penalties and taxes. Early withdrawals from IRAs or 401(k)s are both subject to a 10% penalty along with ordinary income taxes.