How to use the IRA calculator
- Enter the pre-tax earnings you set aside each year. The traditional IRA gets all of it; the other two get what is left after income tax.
- Enter the years until you withdraw the money.
- Enter your expected annual return.
- Enter your tax rate now and the tax rate on withdrawals in retirement.
- Enter the tax rate on taxable-account returns: often 15% for stock funds held long term, or your income tax rate for interest.
- Read which option leaves you the most after tax, and the side-by-side table.
How the three options are compared
The comparison is fair because every option costs you the same take-home pay. Putting $7,500 into a deductible traditional IRA saves you the income tax on it now, so it costs $7,500 × (1 − 22%) = $5,850 of take-home pay, exactly what you could put into a Roth or a brokerage account instead.
Notice that the traditional and Roth formulas differ only in which tax rate applies. If your rate in retirement equals your rate today, they give exactly the same answer. The taxable account always trails both, because tax takes a slice of its return every year.
Worked example
The defaults are $7,500 a year for 30 years at 7%, a 22% tax rate now, 15% in retirement and 15% on taxable returns.
- Growth factor: (1.07^30 − 1) ÷ 0.07 × 1.07 = 101.073041
- Traditional IRA: $7,500 × 101.073041 = $758,047.81, minus 15% tax on withdrawal = $644,341
- Roth IRA: $5,850 × 101.073041 = $591,277 (no tax to pay)
- Taxable account: $5,850 a year at 7% × 0.85 = 5.95% grows to $485,717
The traditional IRA wins by $53,063 because the money is taxed at 15% on the way out instead of 22% on the way in. If you expect a 32% rate in retirement, the traditional IRA drops to $515,473 and the Roth's $591,277 comes out on top. At 22% in both years the two IRAs tie at $591,277.
Which IRA fits you?
| Your situation | Usually better |
|---|---|
| Tax rate likely lower in retirement | Traditional IRA |
| Tax rate likely higher in retirement (early career, rising income) | Roth IRA |
| Unsure | Split between the two to diversify your future tax bill |
| Income above the Roth limit, or no deduction allowed | Taxable account or a backdoor Roth (ask a tax adviser) |
2026 limits and deduction rules
In 2026 you can contribute up to $7,500 to IRAs in total, or $8,600 if you are 50 or older, from IRS Notice 2025-67. If you or your spouse is covered by a workplace retirement plan, the traditional IRA deduction phases out with modified AGI between $81,000 and $91,000 for single filers, $129,000 and $149,000 for joint filers when the contributor is covered, and $242,000 and $252,000 when only the spouse is covered. Roth contributions phase out between $153,000 and $168,000 (single) and $242,000 and $252,000 (joint). The Roth IRA calculator applies the limits by age.
Frequently asked questions
Is a traditional or Roth IRA better?
It comes down to your tax rate now versus your tax rate when you withdraw. Lower later favors traditional; higher later favors Roth; equal makes them identical. Because nobody knows future tax rates, many people hold some of each.
Why does the Roth IRA get a smaller contribution here?
To keep the comparison fair. A $7,500 traditional contribution is deductible, so it costs only $5,850 of take-home pay at a 22% rate. The calculator puts that same $5,850 into the Roth. If you can afford to put the full $7,500 into a Roth, it will beat a $7,500 traditional contribution unless your tax rate falls sharply.
What tax rate should I use for retirement?
Use the average rate you expect to pay on your withdrawals, not just your top bracket. The standard deduction and the lower brackets mean many retirees pay a lower average rate than their bracket suggests; the income tax calculator shows your effective rate.
Does the calculator include the 10% early withdrawal penalty?
No. It assumes you withdraw after age 59½. Taking money out earlier usually costs a 10% penalty on traditional IRA withdrawals and on Roth earnings, on top of any income tax.
Related calculators
- Roth IRA Calculator — Project your tax-free Roth IRA balance with the 2026 contribution limits and compare it with a taxable account.
- 401(k) Calculator — Project your 401(k) balance with your employer match, salary raises and the 2026 IRS contribution limits.
- Retirement Calculator — See what your savings grow to by retirement, how long they last, and how much more to save each month.
- Income Tax Calculator — Estimate your 2026 US federal income tax, tax bracket and effective rate for any filing status.
Results are estimates for educational purposes and are not financial, tax or legal advice. See our disclaimer.