IRA Calculator
Compare Traditional IRAs, SEP IRAs, SIMPLE IRAs, Roth IRAs, and regular taxable savings accounts to plan your retirement.
Comparison Results
| Traditional IRA | Roth IRA | Regular Taxable Savings | |
|---|---|---|---|
| Balance at retirement | |||
| Balance at retirement (after tax) |
Balance Accumulation
Final Balance Comparison
Annual Schedule
| Age | Traditional IRA (Before Tax) | Traditional IRA (After Tax) | Roth IRA (After Tax) | Regular Taxable Savings (After Tax) | ||||
|---|---|---|---|---|---|---|---|---|
| Start | End | Start | End | Start | End | Start | End | |
Understanding IRAs (Individual Retirement Accounts)
An IRA (Individual Retirement Account) is a type of retirement plan with taxation benefits defined by IRS Publication 590. It is a government tax break designed to incentivize people to invest money for retirement.
Types of IRAs
Traditional IRA
Contributions are tax-deductible, lowering your current taxable income. Withdrawals in retirement are taxed as ordinary income. Ideal for people who expect to be in a lower tax bracket after retirement.
Roth IRA
Contributions are made with after-tax dollars (no immediate tax benefit), but qualified withdrawals in retirement are completely tax-free. Excellent option if you expect higher tax rates in retirement.
SEP IRA
Simplified Employee Pension IRAs allow employers to contribute to employees’ retirement. Popular among small business owners and self-employed individuals. Higher contribution limits than traditional IRAs.
SIMPLE IRA
Savings Incentive Match Plan for Employees allows both employer and employee contributions. Designed for small businesses with 100 or fewer employees. Features mandatory employer contributions.
Key Considerations
- Contribution Limits: Traditional and Roth IRAs have annual contribution limits ($7,000 for 2024, plus $1,000 catch-up for those 50+)
- Required Minimum Distributions (RMDs): Traditional IRAs require withdrawals starting at age 73; Roth IRAs have no RMDs
- Early Withdrawal: Taking money before age 59½ typically results in a 10% penalty (with some exceptions)
- Tax Benefits: Different tax advantages depending on the IRA type and your personal situation
- Investment Options: IRAs offer a wide range of investment options including stocks, bonds, mutual funds, ETFs, and more
Which IRA Is Right For You?
The best IRA for you depends on your current income, expected retirement income, and tax situation:
- Traditional IRA: Best if you expect lower tax rates in retirement and want immediate tax deductions
- Roth IRA: Ideal if you expect higher tax rates in retirement or want tax-free withdrawals
- SEP or SIMPLE IRA: Good options for small business owners or self-employed individuals
This calculator is for informational purposes only. Consult with a qualified financial advisor or tax professional for personalized advice.