IRA Calculator

Quick Answer

Last updated: 10 November 2026 ·How we calculate this: future value formula and IRS 2026 limits

How This IRA Calculator Works

Enter your age, when you plan to retire, your current IRA balance, how much you add each year and the return you expect. The calculator grows the balance year by year. Because a traditional IRA is taxed when you take money out, it also shows the value after tax at your expected retirement rate, and the tax you save now from the deduction.

How to Use the IRA Calculator

1. Enter your age and the age you plan to retire.
2. Enter your current IRA balance and yearly contribution.
3. Enter the return you expect each year.
4. Enter your tax rate now and the rate you expect in retirement.
5. Press Calculate and compare the traditional and Roth results.

Formulas Used

• Balance at retirement: FV = B × (1 + r)^n + C × ((1 + r)^n − 1) ÷ r
• After-tax value (traditional): FV × (1 − retirement tax rate)
• Tax saved now: contribution × current tax rate
• Roth with the same cost: FV × (1 − current tax rate), because a Roth contribution is made with money that has already been taxed

B is today's balance, C the yearly contribution, r the yearly return and n the years until retirement.

Key Terms

• Traditional IRA: an individual retirement account with tax-deferred growth and possibly deductible contributions.
• Roth IRA: an IRA funded with after-tax money, with tax-free qualified withdrawals.
• Catch-up contribution: the extra $1,100 allowed for people 50 or older in 2026.
• Phase-out range: the income range where the deduction shrinks to zero.
• RMD: required minimum distribution, the yearly amount you must take out from a set age.

2026 IRA Limits and Deduction Rules

If neither you nor your spouse is covered by a retirement plan at work, the full contribution is deductible at any income. The limit is shared between all your traditional and Roth IRAs.

Worked Example

Someone aged 50 has $40,000 in a traditional IRA, adds the $8,600 limit each year and expects 6% a year until 67. Their tax rate is 24% now and expected to be 24% later.

• Years of saving: 67 − 50 = 17
• Balance at 67: about $350,342
• After tax at 24%: about $266,260
• Tax saved each year now: 8,600 × 24% = $2,064
• With the same tax rate now and later, a Roth IRA with the same after-tax cost ends up with the same amount, $266,260.

Real-Life Examples

• Mid-career saver: $7,500 a year from 35 to 65 at 7%, plus $10,000 today, grows to about $784,578.
• Tax saving now: at a 22% tax rate, deducting $7,500 saves about $1,650 in tax this year.
• Catch-up years: from 50 to 67, adding $8,600 a year at 6% to $40,000 reaches about $350,342.
• Roth or traditional: with 22% now and 12% later, traditional comes out about $78,458 ahead in the default example.

Traditional IRA vs Roth IRA

• Traditional: tax deduction now (if eligible), withdrawals taxed, required minimum distributions later.
• Roth: no deduction now, qualified withdrawals tax-free, no RMDs for the original owner, income limits to contribute.
• Same limit: $7,500 for 2026 ($8,600 at 50 or older) across both types together.

Traditional or Roth IRA?

With the same out-of-pocket cost, the choice mainly comes down to tax rates. If you expect a lower tax rate in retirement than today, a traditional IRA usually leaves you with more. If you expect a higher rate later, a Roth IRA usually wins. Many people split contributions to spread the risk.

Other differences matter too. Traditional IRAs have required minimum distributions from age 73 or 75, while Roth IRAs have none for the original owner. Roth contributions (not earnings) can be taken out at any time. Roth IRAs have income limits for contributing; traditional IRAs do not, but the deduction can be reduced.

Common Mistakes to Avoid

• Going over the limit. Excess contributions face a 6% tax for each year they stay in the account.
• Assuming the full deduction. With a workplace plan, income above the phase-out reduces or removes it.
• Forgetting the tax bill. A traditional IRA balance is not all yours to spend; withdrawals are taxed.
• Early withdrawals. Taking money out before 59½ usually adds a 10% penalty on top of tax.
• Ignoring RMDs. Required minimum distributions start at 73 or 75, depending on your birth year.

Frequently Asked Questions

References & Sources