Case 1
- Current IRA balance
- 10000$
- Annual contribution
- 7500$
- Annual contribution limit
- 7500$
- Expected return
- 7%
- Account type
- Roth — taxed now, withdrawals tax-free
- Tax rate in retirement
- 22%
- Years until retirement
- 30
784,578$
Open with these valuesIRA Calculator
784,578$ after tax
Result: 784,578 $ after taxRoth and Traditional hold the same money and differ in when it is taxed. A Roth is funded with after-tax dollars and a qualified withdrawal is tax-free, so the balance is yours. A Traditional is the reverse: untaxed going in, taxed as income coming out, so a 22 % retirement rate leaves 78 % of the balance.
Worked examples
Case 2
- Current IRA balance
- 10000$
- Annual contribution
- 7500$
- Annual contribution limit
- 7500$
- Expected return
- 7%
- Account type
- Traditional — deducted now, taxed later
- Tax rate in retirement
- 22%
- Years until retirement
- 30
611,971$
Open with these valuesCase 3
- Current IRA balance
- 0$
- Annual contribution
- 8600$
- Annual contribution limit
- 8600$
- Expected return
- 6%
- Account type
- Roth — taxed now, withdrawals tax-free
- Tax rate in retirement
- 22%
- Years until retirement
- 15
200,173$
Open with these valuesHow it's calculated
(balance × (1+r)ⁿ + c × ((1+r)ⁿ − 1) ÷ r) × (1 − tax), tax only on a Traditional IRA
- StepEnter what the account holds now and what you put in each year.
- StepCheck the limit: 7,500 for 2026, or 8,600 from the year you turn 50.
- StepPick Roth or Traditional, and for a Traditional add the tax rate you expect in retirement.
- ResultSet the years left. The result is the balance you can actually spend.
What this number means
Two things drive this number, and only one of them is arithmetic. The arithmetic is ordinary compounding: what the account already holds grows by (1+r) each year, the yearly contribution is added at the end of each year and grows for the years that remain, and the two are added. Contributions are capped at the limit you enter, because paying in more than the law allows is not a plan. That limit is the number that goes stale, which is why it sits in a field rather than in the code: the IRS sets 7,500 for 2026, or 8,600 from the year you turn 50, and it moves most years. The other thing is tax, and it is the whole reason to choose. A Roth is funded with money you have already been taxed on, so a qualified withdrawal — five years in the account and age 59½ — is tax-free, and the balance is what you can spend. A Traditional is the mirror image: the contribution may be deductible now, and every dollar comes out as taxable income later, so at a 22 % rate the spendable figure is 78 % of the balance. Which wins is a bet on your own tax rate then against now, not a fact this page can settle. What it cannot know: your actual return, which is an assumption, not a forecast, and any state tax.
The contribution is capped at the limit
Enter 12,000 against a 7,500 limit and the calculator uses 7,500. Contributing more than the limit is an excess contribution and carries a 6 % tax for every year it stays in the account.
From the year you turn 50, raise the limit
The catch-up contribution lifts the 2026 limit from 7,500 to 8,600. It is a field, so change it in the year you become eligible rather than waiting for this page to change.
Contributions land at the end of each year
That is the cautious assumption. Paying in every January instead multiplies the contributed part by one more year of growth — the same money, a percent or so more.
The limit comes from IRS Publication 590-A
590-A carries the contribution limits and the age-50 catch-up; 590-B carries the withdrawal rules quoted here. The growth arithmetic is not from the IRS — the test cases for it come from a published finance textbook.
Commonly misread
Roth and Traditional grow differently.
They grow identically. The difference is only when the tax is paid: on the way in for a Roth, on the way out for a Traditional.
A Traditional balance of 500,000 is 500,000 to spend.
Every dollar leaves as taxable income. At a 22 % rate that balance is worth 390,000, which is the figure this page shows.
I can put in as much as I like if I start late.
The annual limit applies whatever your age. From the year you turn 50 it rises by the catch-up amount — 1,100 for 2026 — and no further.
Reference table
| Feature | Traditional IRA | Roth IRA |
|---|---|---|
| Contribution | Deductible, with income limits | After tax, with income limits |
| Qualified withdrawal | Taxed as income | Tax-free |
| Withdrawals must start | Age 73 | Never, for the owner |
| Early withdrawal | 10 % extra tax before 59½ | 10 % extra tax before 59½ |
Questions
How much can I contribute to an IRA?
For 2026 the limit is 7,500, or 8,600 from the year you turn 50, across all your IRAs combined. It cannot exceed your taxable compensation for the year, and the IRS adjusts it most years.
Is a Roth or a Traditional IRA better?
It is a bet on tax rates. A Roth wins if your rate in retirement is higher than it is now, a Traditional if it is lower, and at the same rate the two end up level.
When is a Roth withdrawal tax-free?
When it is qualified: the account has been open five years and you are 59½ or older, disabled, or buying a first home with up to 10,000. Otherwise the earnings are taxable and a 10 % additional tax can apply.
When do I have to start withdrawing?
A Traditional IRA requires minimum distributions from age 73, by 1 April of the following year for the first one. A Roth IRA requires nothing during the original owner's lifetime.
What return should I assume?
That is your assumption, not a fact, which is why the field starts at 7 % rather than a promise. Try a lower figure alongside it — the gap between 5 % and 8 % over thirty years is larger than most people expect.
Does this include employer contributions or a 401(k)?
No. It models one IRA and its own contributions. A workplace plan has its own, much higher limit and belongs in a separate calculation.
Sources and last check
Information, not financial advice.