IRA Calculator
Modify the values and click calculate
Traditional IRA Details
Projected Pre-Tax Balance
Enter your IRA details to project your retirement balance.
This calculator provides an educational estimate only and is not tax or financial advice. Annual contribution limits and eligibility rules set by the IRS are not modeled here -- consult a qualified professional.
Understanding the Traditional IRA
A Traditional IRA (Individual Retirement Account) is funded with pre-tax dollars: your contribution typically reduces your taxable income for the year you make it, and the entire balance grows tax-deferred until you start taking withdrawals in retirement -- at which point withdrawals are taxed as ordinary income. This calculator projects your balance and shows both sides of that tax trade.
A Deduction Today
Contributions to a Traditional IRA are generally deductible in the year you make them, lowering your current taxable income -- a benefit you feel immediately, unlike a Roth IRA.
Taxed on the Way Out
Every dollar you eventually withdraw -- both your original contributions and all the growth -- is taxed as ordinary income at whatever your tax rate happens to be at that time.
Decades of Tax-Deferred Growth
Because no tax is due on gains until withdrawal, your money compounds on the full pre-tax balance every year -- rather than on a balance already reduced by yearly taxes on gains.
Traditional vs. Roth IRA
A Traditional IRA gives you the tax break now and taxes withdrawals later; a Roth IRA is the mirror image -- you contribute after-tax dollars now, but qualified withdrawals in retirement are entirely tax-free. If you expect to be in a lower tax bracket in retirement than you are today, Traditional often wins; if you expect a higher bracket later, Roth often wins. See our Roth IRA Calculator to compare.
Worked Example
Suppose you start with a $20,000 balance, contribute $7,000 per year, expect a 7% annual return over 25 years, are in the 24% bracket today, and expect a 22% bracket at withdrawal:
- Projected pre-tax balance: approximately $551,292.
- This year's tax savings: $7,000 × 24% = $1,680.
- After-tax value at withdrawal: $551,292 × (1 − 22%) ≈ $430,008.
The Tax Trade
- Savings Today: $1,680.00
- Pre-Tax Balance: $551,291.92
- After-Tax Value: $430,007.70
Key Takeaways
- The Deduction Is Immediate: Your tax savings from this year's contribution land on this year's tax return, regardless of how the market performs afterward.
- Withdrawals Are Ordinary Income: The entire balance -- contributions and growth alike -- is taxed when withdrawn, so the after-tax figure matters more than the headline balance.
- Compare Your Tax Brackets: Whether Traditional or Roth wins depends on how your current tax bracket compares to your expected bracket in retirement.
- This Is an Estimate: IRS contribution limits, income-based deduction phase-outs, and required minimum distributions are not modeled here -- see our RMD Calculator for the withdrawal-age side of this account.