IRA Calculator – Traditional vs Roth IRA Growth
Under 50: $7,000/year
Age 50+: $8,000/year (includes $1,000 catch-up)
Projected Value at Retirement
$0
Total Contributions
$0
Total Earnings
$0
Understanding IRA Retirement Accounts
An Individual Retirement Account (IRA) is a tax-advantaged savings vehicle designed to help Americans save for retirement. There are two main types: Traditional and Roth. Both offer significant tax benefits, but they work differently. This calculator helps you project how your IRA contributions could grow over time based on your annual contributions, expected investment return, and time horizon.
A Traditional IRA allows you to make potentially tax-deductible contributions, meaning you may reduce your taxable income in the year you contribute. Your investments grow tax-deferred, but you pay ordinary income tax on withdrawals in retirement. Required Minimum Distributions (RMDs) must begin at age 73. A Roth IRA, on the other hand, uses after-tax dollars for contributions, so there is no upfront tax break. However, all growth and qualified withdrawals in retirement are completely tax-free, and there are no RMDs during your lifetime.
The growth calculation uses the future value of an annuity formula: FV = PMT × [((1 + r)n − 1) / r], where PMT is your annual contribution divided by 12 for monthly compounding, r is the monthly return rate, and n is the total number of months until retirement. Starting early is critical because compound interest accelerates dramatically over longer periods. For instance, contributing $7,000 per year for 35 years at 7% annual return could grow to over $1.1 million, even though your total contributions would only be $245,000. Use this calculator to see how different contribution amounts and timelines affect your retirement nest egg.