IRA Calculator
Traditional vs Roth IRA growth side-by-side — pick the better one for your bracket.
Traditional IRA wins
$25,848
Rule of thumb: Roth wins when you're in a low bracket now (< 22%). Traditional wins if you'll be in a lower bracket in retirement.
An IRA calculator projects how contributions to an Individual Retirement Account grow over time and lets you compare the two main types side by side. The pre-tax growth math is identical for both; the difference is when you pay taxes.
A Traditional IRA may give you a tax deduction now and taxes your withdrawals later as ordinary income. A Roth IRA gives no deduction today but delivers tax-free qualified withdrawals in retirement. Which comes out ahead depends largely on your tax bracket now versus in retirement.
Modeling both makes the tax trade-off concrete instead of theoretical, so you can see the after-tax outcome rather than just the headline balance.
How this calculator works
Both account types use the same compounding formula for contributions: FV = PMT x [((1+r)^n - 1) / r], plus FV = PV x (1+r)^n for any existing balance. Example: contributing the 2026 IRA limit of $7,500 per year (about $625/month) for 30 years at a 7% annual return grows to roughly $708,000 before taxes. The divergence comes at withdrawal. With a Roth, that balance is yours tax-free if the withdrawal is qualified. With a Traditional IRA, withdrawals are taxed as ordinary income, so at a 22% rate the same balance is worth about $552,000 after tax, though you may have received deductions along the way that offset some of that. For 2026 the IRA contribution limit is $7,500 with a $1,100 catch-up at age 50+; always check the current year's IRS limit.
Assumptions and data behind the estimate
Both account types grow with the same compounding math — a lump sum as PV x (1+r)^n and contributions as an annuity — after which the after-tax result diverges: Traditional withdrawals are taxed as ordinary income while qualified Roth withdrawals are tax-free. The comparison assumes a constant return and a single assumed tax rate at withdrawal, and does not model Roth income phase-outs (direct contributions begin phasing out around $153k single / $242k married filing jointly MAGI for 2026), Traditional deduction limits, or future tax-law changes. The 2026 IRA limit is $7,500, or $8,600 at age 50+; your actual outcome depends on real returns and your tax situation, so this is education, not tax advice.
What affects the number
- Tax treatment: Traditional is pre-tax now and taxed at withdrawal; Roth is after-tax now and tax-free on qualified withdrawals. Your current vs future bracket drives the choice.
- Roth income limits: eligibility to contribute to a Roth IRA phases out above certain modified adjusted gross income levels, which change yearly.
- Traditional deductibility: if you or a spouse are covered by a workplace plan, the Traditional IRA deduction phases out over set income ranges, reducing or eliminating the upfront tax break.
- Annual contribution limit: the IRS caps IRA contributions each year across all your IRAs combined, with extra catch-up room at 50+. Confirm the current year's figure.
- Required minimum distributions: Traditional IRAs require withdrawals starting at the RMD age; Roth IRAs have no RMDs for the original owner, aiding tax planning and inheritance.
- Time horizon and return: as with any long-term account, years invested and the assumed return move the ending balance far more than small tweaks to either input.
Frequently asked questions
What is the difference between a Traditional and Roth IRA?
The core difference is tax timing. Traditional IRA contributions may be tax-deductible now, and withdrawals in retirement are taxed as ordinary income. Roth IRA contributions are made with after-tax money and give no deduction, but qualified withdrawals are completely tax-free. Roth also has no required minimum distributions for the original owner, while Traditional accounts do.
How much can I contribute to an IRA?
The IRS sets a combined annual limit across all your IRAs that adjusts for inflation over time. For 2026 it is $7,500, with an additional $1,100 catch-up contribution allowed at age 50 or older (so $8,600 total). Always check the current year's IRS limit, and note that Roth eligibility phases out at higher incomes.
Which is better, a Roth or Traditional IRA?
It depends on whether your tax rate will be higher now or in retirement. If you expect a higher bracket later, a Roth is usually better because you pay tax at today's lower rate and withdraw tax-free. If you expect a lower bracket in retirement, a Traditional IRA's upfront deduction may win. Many savers hold both to diversify their future tax exposure.
Can I contribute to both an IRA and a 401(k)?
Yes. The IRA and 401(k) limits are separate, so you can fund both in the same year. However, being covered by a workplace plan like a 401(k) can reduce or eliminate your Traditional IRA deduction above certain income levels. A common strategy is to capture your full 401(k) match first, then contribute to an IRA.
Sources and references
- IRS — Retirement plans: IRA contribution limits and rules
- U.S. SEC — Investor.gov: compound interest and investing basics
This calculator provides general estimates for educational purposes only and is not financial, tax, or investment advice. Your actual results depend on your specific situation, tax rules, market returns, and the current year's IRS limits.