Traditional IRA Calculator
Project growth in a Traditional IRA funded with pre-tax contributions.
Your Details
Contributions vs. Growth
What makes up your final balance
- Contributed$138.0K
- Growth$289.1K
Final Balance by Rate of Return
Sensitivity to your assumed return
Balance Growth Over Time
Total balance year by year
Contributed vs. Growth by Year
How growth accelerates over time
How It Works
- Enter your starting balance and regular contribution.
- Enter your expected annual rate of return.
- Set your time horizon in years.
- Press Calculate to update your results and charts.
Formula Used
P = current balance, r = periodic rate, t = number of periods, PMT = contribution per period. Withdrawals in retirement are generally taxed as income.
Good to Know
- • Starting earlier matters more than contributing more later.
- • Small rate differences compound into large gaps over decades.
- • Consistent contributions smooth out market swings.
Important Notes
- • Returns are assumed, not guaranteed.
- • Figures don't account for taxes or fees unless noted.
- • Past performance doesn't predict future results.
Pre-Tax Contributions, Taxed Withdrawals
Traditional IRA contributions are often tax-deductible in the year they're made, which lowers your taxable income now. In exchange, withdrawals in retirement are generally taxed as ordinary income. This can work well if you expect to be in a lower tax bracket in retirement than you are today.
Required Minimum Distributions
Unlike a Roth IRA, Traditional IRAs are subject to required minimum distributions (RMDs) starting at an age set by current IRS rules — you can't leave the money growing indefinitely. It's worth factoring future RMDs into a retirement income plan well before they start.
A Short Glossary
- Pre-tax contribution — money contributed before income tax is applied, often reducing your current-year taxable income.
- Tax-deferred growth — investment gains that aren't taxed until withdrawn.
- Required Minimum Distribution (RMD) — the mandatory withdrawal that begins at a set age.
Trying It With Real Numbers: Pre-Tax Savings Today
Contributing $400/month ($4,800/year) to a Traditional IRA at a 22% marginal tax bracket reduces this year's tax bill directly:
Immediate tax savings: $4,800 × 22% ≈ $1,056
Effective out-of-pocket cost: $4,800 − $1,056 = $3,744
That $1,056 tax saving is the direct benefit of pre-tax contributions — but remember that withdrawals in retirement will be taxed as ordinary income at whatever rate applies then, which is the trade-off against a Roth IRA's after-tax, tax-free-withdrawal structure.
Tax Bracket Impact Table
$4,800 annual contribution, tax savings by bracket:
| Bracket | Tax Saved |
|---|---|
| 12% | $576 |
| 22% | $1,056 |
| 32% | $1,536 |
Easy Mistakes to Make With Traditional IRAs
- Forgetting RMDs will eventually apply — unlike a Roth, withdrawals are mandatory starting at a set age.
- Not checking deduction eligibility if covered by a workplace plan — deductibility can phase out at higher incomes.