If your tax rate in retirement will be lower than today, a traditional IRA usually wins; if higher, a Roth. With equal rates they come out the same. Roth IRAs also have no required minimum distributions.
How to use the IRA Calculator – Traditional vs Roth
- Current age
- Retirement age
- Years of withdrawals
- Current IRA balance
- Annual contribution
- Expected annual return
- Current tax rate
- Tax rate in retirement
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter your age, retirement age, years of withdrawals, current balance, yearly contribution, expected return and tax rates now and in retirement.
Tips
- Start early – time does more of the work than the amount you save.
- Take the full employer match if your plan offers one.
- Plan with a cautious return (4–6% after inflation) and check again every year.
- Know the contribution limits and required minimum distribution rules for your accounts.
Common mistakes to avoid
- Ignoring inflation when setting a retirement target.
- Underestimating how long retirement can last.
- Withdrawing early and paying penalties and taxes.
Inputs explained
| Field | What to enter |
|---|---|
| Current age | A number |
| Retirement age | A number |
| Years of withdrawals | A number |
| Current IRA balance | Amount in your currency |
| Annual contribution | Amount in your currency |
| Expected annual return | In % |
| Current tax rate | In % |
| Tax rate in retirement | In % |
What each result means
- Years to retirement = max([Retirement age] – [Current age], 0)
- Contribution used (capped) = min([Annual contribution], [2026 contribution limit])
- Traditional IRA balance at retirement = fvc([Expected annual return]÷100, [Years to retirement], [Current IRA balance], [Contribution used (capped)])
- Traditional – yearly withdrawal after tax = pmt([Expected annual return]÷100, [Years of withdrawals], [Traditional IRA balance at retirement])×(1 – [Tax rate in retirement]÷100)
- Roth IRA balance (same pre-tax cost) = fvc([Expected annual return]÷100, [Years to retirement], [Current IRA balance], [Contribution used (capped)]×(1 – [Current tax rate]÷100))
- Roth – yearly withdrawal (tax-free) = pmt([Expected annual return]÷100, [Years of withdrawals], [Roth IRA balance (same pre-tax cost)])
Formula
Balance = current balance × (1 + r)^n + contribution × ((1 + r)^n − 1) ÷ rTraditional: contributions are deductible now; withdrawals taxed at the retirement rateRoth: same pre-tax cost buys contribution × (1 − current rate); withdrawals tax-freeYearly withdrawal = pmt(r, years in retirement, balance)Worked example
Inputs — Current age: 30; Retirement age: 65; Years of withdrawals: 25; Current IRA balance: $10,000; Annual contribution: $7,500; Expected annual return: 7 %; Current tax rate: 22 %; Tax rate in retirement: 15 %.
Results — Years to retirement = 35; 2026 contribution limit = $7,500.00; Contribution used (capped) = $7,500.00; Traditional IRA balance at retirement = $1,143,542.40; Traditional – yearly withdrawal after tax = $83,408.77; Roth IRA balance (same pre-tax cost) = $915,451.55; Roth – yearly withdrawal (tax-free) = $78,555.37; Better choice = Traditional IRA.
Frequently asked questions
What is the IRA contribution limit for 2026?
$7,500, or $8,600 if you're 50 or older.
Traditional or Roth IRA?
Traditional if you expect a lower tax rate in retirement; Roth if higher.
Can I have both?
Yes, but the limit applies to your combined contributions.
What formula does the IRA Calculator – Traditional vs Roth use?
Balance = current balance × (1 + r)^n + contribution × ((1 + r)^n − 1) ÷ r.