Projected IRA Growth (After-Tax Value vs Contributions)
Growth Schedule (every 5 years)
Age
Balance
Total Contributed
Gain
Traditional IRA vs Roth IRA — Side-by-Side
Traditional IRA
Gross Balance at Retirement
—
After-Tax Value
—
Cumulative Tax Savings (now)
—
Annual Income (4% rule, after-tax)
—
Pre-tax contributions. Withdrawals taxed as ordinary income. RMDs required at 73.
VS
Roth IRA
Gross Balance at Retirement
—
After-Tax Value
—
Up-Front Tax Cost (cumulative)
—
Annual Income (4% rule, tax-free)
—
After-tax contributions. All qualified withdrawals are completely tax-free. No RMDs.
Return Rate Scenarios
🐻 Bear (−2%)
—
—/yr income
📊 Base (your rate)
—
—/yr income
🐂 Bull (+2%)
—
—/yr income
Tax Rate Sensitivity — After-Tax Advantage
Positive = Traditional IRA wins | Negative = Roth IRA wins | Current cell outlined in gold. Rows = current tax rate, Columns = retirement tax rate.
Feature Comparison (2025)
Factor
Traditional IRA
Roth IRA
Tax on contributions
Pre-tax (deductible if eligible)
After-tax — no deduction
Tax on withdrawals
Ordinary income tax
Tax-free (qualified)
RMDs required
Yes — age 73 (SECURE 2.0)
No — never during owner's life
Income limits (2025)
No direct limit (deductibility phases out)
$165K single / $246K married
Best when
Tax rate lower in retirement
Tax rate same or higher in retirement
Early withdrawal penalty
10% + income tax (before 59½)
10% on earnings only (before 59½)
Contribution limit (2025)
$7,000 ($8,000 age 50+)
$7,000 ($8,000 age 50+)
Retirement Readiness
Calculating...
Score based on your target income from the Goal Seeker below. Update the goal to recalculate.
Goal Seeker — Find Required Contribution
Enter your retirement income target and Social Security estimate. We'll calculate the annual IRA contribution needed to hit your goal.
Required Annual Contribution—
As % of Max IRS Limit ($8,000)—
Needed Balance at Retirement—
Your Current Projected Balance—
Bear / Base / Bull Scenarios
Scenario
Return Rate
Balance at Retirement
After-Tax Balance
Annual Income (4%)
Contribution Ladder
How does your projected balance change at different annual contribution levels? Your current contribution is highlighted.
Annual Contribution
% of IRS Max
Balance at Retirement
After-Tax Balance
Annual Income (4%)
Required Minimum Distributions (Traditional IRA)
Traditional IRA holders must begin RMDs at age 73 (SECURE 2.0 Act). Roth IRAs have no RMDs during the owner's lifetime. Amounts shown are before-tax withdrawals; "After Tax" column applies your retirement tax rate.
First RMD Age
73
First RMD Amount
—
Projected Balance at 73
—
Age
IRS Divisor
Est. Balance
RMD Amount
After Tax
How to Use This Calculator
1
Enter Account Details
Choose Traditional or Roth IRA type, then enter your current age, retirement age, starting balance, and annual contribution.
2
Set Tax Assumptions
Enter your current and expected retirement tax rates, plus income to check Roth eligibility. The calculator will alert you if you're in the phase-out range.
3
Explore Scenarios & Plan
Switch to Scenario Analysis for Trad vs Roth comparison and tax sensitivity. Use Retirement Planner to set an income goal and find the contribution needed.
Formula & Methodology
Future Value with Annual Contributions
FV = PV(1+r)ⁿ + C × [((1+r)ⁿ − 1) / r]
Where PV = current balance, C = annual contribution, r = annual return rate, n = years to retirement. This is end-of-year compounding.
Traditional IRA withdrawals are taxed as ordinary income at your retirement rate. Roth IRA qualified withdrawals are completely tax-free.
Annual Income (4% Rule)
Annual Income = After-Tax Balance × 4%
The 4% rule is a commonly used safe withdrawal rate (SWR) guideline suggesting you can withdraw 4% of your portfolio in the first year of retirement, adjusted for inflation each year, with a high likelihood the portfolio lasts 30+ years.
Contributions may be tax-deductible, and earnings grow tax-deferred. Withdrawals in retirement are taxed as ordinary income. Required Minimum Distributions begin at age 73.
Roth IRA
Contributions are made with after-tax dollars, but all qualified withdrawals in retirement are completely tax-free. No RMDs during the owner's lifetime. Subject to income limits.
Contribution Limit (2025)
$7,000 per year across all IRAs combined. If you are age 50 or older, you may contribute an additional $1,000 catch-up contribution for a total of $8,000.
RMD (Required Minimum Distribution)
Mandatory annual withdrawals from Traditional IRAs starting at age 73 under SECURE 2.0. The amount is calculated by dividing your IRA balance by an IRS life expectancy factor (Uniform Lifetime Table).
MAGI Phase-Out (Roth)
For 2025, single filers earning $150,000–$165,000 can only make a reduced Roth contribution. Above $165,000 ($246,000 for married filing jointly), direct Roth contributions are not allowed — consider a Backdoor Roth.
Backdoor Roth IRA
A strategy for high earners exceeding the Roth income limits: make a non-deductible Traditional IRA contribution, then convert it to Roth IRA. Consult a tax advisor about the pro-rata rule.
Real-World Examples
Example 1
The Early Starter
Age 25, $0 starting balance, $7,000/yr contribution, 8% return, retire at 65
Result: ~$1,864,000 projected. Starting 10 years earlier vs age 35 nearly doubles your final balance — the power of compound growth.
Example 2
The Catch-Up Saver (Age 52)
Age 52, $120,000 balance, $8,000/yr (max + catch-up), 7% return, retire at 67
Result: ~$570,000 projected. Even starting late with maximum contributions builds substantial retirement income of ~$22,800/yr (4% rule).
Maximizing Your IRA for Retirement
Traditional vs. Roth: The Tax Decision
The core question is whether your tax rate will be higher or lower in retirement. If you expect a lower rate in retirement, Traditional IRA gives you a deduction now when it's worth more. If you expect higher rates later — or simply prefer tax certainty — Roth locks in today's rate and all future growth is tax-free. Many financial advisors recommend diversifying across both types for maximum flexibility.
The Power of Maxing Out Early
Contributing the full $7,000 annually from age 25 to 65 at 8% returns grows to over $1.8 million. Every year you delay or under-contribute loses not just that year's contribution, but all the compounding that contribution would have generated. Even contributing $1,000/yr less than the maximum over 30 years costs you over $100,000 in projected balance.
Catch-Up Contributions at 50+
Once you turn 50, you can add an extra $1,000 per year to your IRA (total $8,000 in 2025). If you're behind on retirement savings, this is an important tool. Contributing the full catch-up amount from age 50 to 65 at 7% adds approximately $250,000 to your projected balance compared to contributing just $7,000/yr.
Understanding RMDs and Tax Planning
Traditional IRA holders must take Required Minimum Distributions starting at age 73. RMDs are calculated by dividing your account balance by an IRS life expectancy factor. Large RMDs can push you into higher tax brackets and affect Medicare premiums. Roth conversions before age 73 can reduce future RMD amounts and provide tax-free income in retirement.
Backdoor Roth for High Earners
If your income exceeds the Roth IRA limits ($165,000 single / $246,000 married for 2025), the backdoor Roth strategy allows you to contribute indirectly. Make a non-deductible Traditional IRA contribution, then convert the full amount to Roth. Be aware of the pro-rata rule if you have existing pre-tax IRA balances — consult a tax advisor.