IRA Retirement Calculator 💰
Compare Traditional IRA, Roth IRA, and regular taxable savings to maximize your retirement funds
IRA Comparison Calculator
Enter your details to compare how different retirement accounts grow over time.
Understanding IRA Accounts in the U.S. 🇺🇸
Types of IRAs and Their Benefits
Traditional IRA
- Contributions may be tax-deductible
- Tax-deferred growth
- Taxed as income when withdrawn
- Required Minimum Distributions (RMDs) after age 73
Roth IRA
- Contributions are made with after-tax dollars
- Tax-free growth
- Tax-free withdrawals in retirement
- No RMDs during the owner's lifetime
SEP & SIMPLE IRAs
- Designed for small businesses and self-employed
- Higher contribution limits
- Employer contributions are tax-deductible
- SIMPLE IRAs have mandatory employer contributions
Key Differences Between IRA Types
| Feature | Traditional IRA | Roth IRA | SEP/SIMPLE IRA |
|---|---|---|---|
| Tax Deduction | Immediate (if eligible) | None | Immediate for employer |
| Withdrawal Taxes | Taxed as income | Tax-free | Taxed as income |
| RMDs | Starting at 73 | None | Starting at 73 |
| 2025 Contribution Limit | $7,000 ($8,000 if 50+) | $7,000 ($8,000 if 50+) | SEP: $70,000 or 25% of income SIMPLE: $16,500 (+$3,500 if 50+) |
Choosing the Right IRA for Your Situation
When Traditional IRA is Better
- You expect to be in a lower tax bracket in retirement
- You need the immediate tax deduction
- Your income is too high for Roth IRA contributions
- You're self-employed and want higher contribution limits (SEP IRA)
When Roth IRA is Better
- You expect to be in a higher tax bracket in retirement
- You want tax-free withdrawals later
- You want to avoid RMDs
- You're young and in a low tax bracket now
IRA Contribution Strategies
Maximizing Contributions
- Contribute early in the year to maximize growth time
- Take advantage of catch-up contributions if 50+
- Consider a backdoor Roth IRA if income exceeds limits
- Automate contributions to ensure consistency
Investment Strategies
- Diversify across asset classes
- Consider target-date funds for hands-off investing
- Place tax-inefficient investments in IRAs
- Rebalance annually to maintain target allocation
IRA Withdrawal Rules and Penalties
Traditional IRA
- 10% penalty on withdrawals before 59½ (with exceptions)
- Required Minimum Distributions start at age 73
- Early withdrawals taxed as income plus penalty
- Exceptions for first-time home purchase, education, medical expenses
Roth IRA
- Contributions can be withdrawn anytime tax-free
- Earnings withdrawals before 59½ may incur penalty
- Five-year rule applies to earnings withdrawals
- No RMDs during the owner's lifetime
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Disclaimer:
This IRA calculator provides estimates based on the inputs provided. Actual account growth will vary based on market performance, contribution patterns, and tax law changes. The calculator assumes consistent annual contributions and a constant rate of return, which may not reflect actual investment experience. Tax rates are estimates and may vary based on future tax laws and your personal situation. Please consult with a financial advisor or tax professional for personalized advice regarding your retirement planning.