IRA Calculator
See how much your Traditional IRA could be worth at retirement — growing tax-deferred — and how much income tax you'd owe when you withdraw. Adjust your contribution, return and timeline to watch compounding play out.
Your numbers
New to this? Leave the defaults — they're realistic — and just change your age and contribution.
Contributions vs tax-deferred growth
How much of your balance you put in versus how much compounding added.
Year-by-year growth
Your balance at the end of each year until retirement.
| Age | Total contributed | Growth | Balance |
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How a Traditional IRA works
A Traditional IRA is a retirement account with a "tax-later" deal: you often contribute money before tax (a deduction now), it grows tax-deferred for decades, and then you pay ordinary income tax on whatever you withdraw in retirement. You get the tax break up front and settle up at the end.
That tax-deferral is powerful: because nothing is taxed along the way, your full balance compounds year after year. In the default example, you contribute $255,000 over 35 years but end with over $1 million — more than $800,000 of which is growth you haven't paid tax on yet, which is exactly why withdrawals are taxed.
A few rules shape it: contributions are capped each year ($7,000 in 2025, or $8,000 if you're 50 or older, adjusted for inflation); deductibility can phase out at higher incomes if you're covered by a workplace plan; withdrawals before 59½ usually face a 10% penalty plus tax; and Required Minimum Distributions (RMDs) begin around age 73.
How we calculate it
We grow your balance one year at a time: apply your expected return, then add that year's contribution, and repeat until retirement.
r = expected annual return (e.g., 7% = 0.07)
n = years until retirement
Because a Traditional IRA is taxed at withdrawal, we estimate the after-tax value by applying your expected retirement tax rate:
Worked example (the defaults above):
- Age 30 to 65 = 35 years of growth.
- $10,000 starting balance grows to about $107,000 on its own.
- $7,000/year for 35 years at 7% adds about $968,000.
- Total ≈ $1,074,000 tax-deferred ($255,000 contributions, ~$819,000 growth).
- At a 22% retirement tax rate, about $838,000 after tax, with roughly $236,000 owed in income tax.
This is a simplified projection: it assumes a steady return, a fixed contribution and a single flat tax rate on the entire withdrawal. Treat the result as an illustration, not a guarantee.
Traditional vs Roth IRA
Both are great retirement accounts; the difference is when you pay the tax:
- Traditional IRA — often deduct now (pre-tax), grow tax-deferred, then pay income tax on withdrawals.
- Roth IRA — pay tax now (after-tax contributions), then withdraw tax-free in retirement.
If you expect a lower tax bracket in retirement than today, the Traditional IRA usually wins. If you expect the same or a higher bracket later, the Roth often wins. When in doubt, many people hold both.
What grows your IRA the most
- Time. The biggest factor. Starting at 25 instead of 35 can roughly double your final balance.
- Consistent contributions. Maxing out every year matters more than picking the perfect investment.
- Your return. Small differences compound into big differences over 30+ years.
- Not touching it. Early withdrawals cost taxes, a likely 10% penalty, and all the future growth that money would have earned.
Glossary
- Traditional IRA
- An individual retirement account funded with (often) pre-tax money; it grows tax-deferred and withdrawals are taxed as ordinary income.
- Tax-deferred
- Growth that isn't taxed year to year — you pay the tax later, when you withdraw, letting the full balance compound.
- RMD (Required Minimum Distribution)
- The minimum you must withdraw from a Traditional IRA each year once you reach a certain age (around 73 under current rules).
- Deduction
- The up-front tax break for contributing; it lowers your taxable income now, though it can phase out at higher incomes.
- MAGI
- Modified Adjusted Gross Income — used to decide whether your contribution is fully deductible if you're covered by a workplace plan.
- Contribution limit
- The most you can add per year across your IRAs ($7,000 in 2025, $8,000 if 50+), adjusted for inflation.
Frequently asked questions
How much will my IRA be worth at retirement?
A 30-year-old starting with $10,000 and adding $7,000/year until 65 at a 7% return would have roughly $1.07 million tax-deferred. At a 22% retirement rate that's about $838,000 after tax (~$236,000 owed). Plug in your own numbers above.
What's the IRA contribution limit?
For 2025, $7,000 a year — or $8,000 if you're 50 or older. This combined limit applies across all your Traditional and Roth IRAs and rises with inflation, so check the current figure.
Traditional vs Roth IRA — which is better?
It comes down to your tax rate now versus in retirement. Traditional (deduction now, taxed later) can win if you expect a lower bracket later; Roth (after-tax now, tax-free later) tends to win if you expect the same or higher. Try the Roth IRA calculator to compare.
Are IRA contributions tax-deductible?
Often, yes — but the deduction can be reduced or phased out if you (or your spouse) are covered by a workplace plan and your income is above certain levels. If you're not covered by a workplace plan, it's usually fully deductible.
What is an RMD?
A Required Minimum Distribution is the minimum you must withdraw from a Traditional IRA each year once you reach about 73. Roth IRAs have no RMDs for the original owner.
When can I withdraw from a Traditional IRA?
Any time — but withdrawals before 59½ generally face income tax plus a 10% penalty (with exceptions). From 59½ on you withdraw penalty-free, and around 73 you must take RMDs.
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