Traditional IRA Calculator
Calculate your Traditional IRA growth and tax savings. See how tax-deferred contributions can grow over time and estimate your retirement income. Traditional IRAs offer upfront tax deductions and tax-deferred growth until withdrawal.
Tax Analysis
How to Use This Traditional IRA Calculator
Enter your current age, retirement age, current IRA balance, and planned annual contribution. Input your expected investment return rate and both your current and expected retirement tax brackets. The calculator will project your IRA balance at retirement, estimate monthly income, and analyze the tax benefits of contributing to a Traditional IRA versus a taxable account.
What is a Traditional IRA?
A Traditional IRA (Individual Retirement Account) is a tax-advantaged retirement savings account. Contributions may be tax-deductible, reducing your taxable income in the year you contribute. Your investments grow tax-deferred, meaning you do not pay taxes on gains, dividends, or interest until you withdraw funds in retirement. This allows your money to compound faster than in a taxable account.
When you withdraw money in retirement (after age 59 and a half), withdrawals are taxed as ordinary income. This makes Traditional IRAs ideal for people who expect to be in a lower tax bracket during retirement than they are now.
Traditional IRA Contribution Limits (2024)
Annual contribution limit: $7,000 (or $8,000 if age 50 or older with catch-up contributions).
Deduction limits may apply if you or your spouse have access to a workplace retirement plan. Full deduction is available for single filers earning under $77,000 or married filing jointly under $123,000.
Traditional IRA vs Roth IRA
- Traditional IRA: Tax deduction now, pay taxes on withdrawals
- Roth IRA: No deduction now, tax-free withdrawals
- Traditional is better if your tax rate will be lower in retirement
- Roth is better if your tax rate will be higher in retirement
- Both have the same contribution limits