IRA Calculator
Settle the traditional-versus-Roth question properly, by comparing them on equal after-tax cost rather than on equal contributions — which is where most calculators get the answer backwards.
IRA Calculator
Results recalculate instantly on every keystroke. Nothing you type is transmitted.
What this result does not account for
- Results are a model, not a quotation — an institution's own figures govern.
- Every input is an assumption; change one and the answer changes with it.
- Rounding is applied only at the display layer, so totals may differ by a cent from a statement that rounds each line.
In short: Contributing $7,000 a year for 30 years at 7% builds $711,649.75. Compared on equal contributions, Roth wins by $156,562.94 because its withdrawals are untaxed. Compared on equal after-tax cost — investing the traditional deduction alongside — traditional wins by $14,232.99. The break-even is exactly your contribution-time tax rate.
Formula
On equal after-tax cost, the traditional account's deduction is itself invested. The two structures are then algebraically identical whenever the two tax rates are equal — the entire decision reduces to which rate you expect to be higher.
Worked Example
- Grow the contributions. $7,000 a year for 30 years at 7% = $711,649.75, of which $501,649.75 is growth.
- Tax the traditional withdrawal. At 22%, $156,562.94 is due, leaving $555,086.80.
- Note the Roth result. Nothing is due, so you keep the full $711,649.75 — apparently a $156,562.94 win.
- But the traditional gave you a deduction. $7,000 × 24% = $1,680 a year, which invested on the same terms becomes $170,795.94.
- Compare on equal cost. $555,086.80 + $170,795.94 = $725,882.74, so traditional wins by $14,232.99.
Analyst's note. The two comparisons give opposite answers, and only the second is economically honest — a $7,000 Roth contribution costs more out of pocket than a $7,000 traditional one, because the latter comes with a $1,680 refund. Once that refund is invested, the mathematics collapses to a single question: will your retirement tax rate be above or below today's? Here 22% against 24% favours traditional, and by exactly the margin that two-point gap implies.
Strengths & Limits Of This Model
Where this engine is strong
- Runs entirely in your browser — no figure you type is transmitted or stored.
- Shows the full working, so every number can be traced and challenged.
- Free, unmetered and free of affiliate incentives.
Where it stops
- Generalised assumptions cannot capture every individual circumstance.
- Jurisdiction-specific rules and mid-year changes may not be reflected.
- A model output is not a substitute for a professional review of your position.
Practical Use Cases
Choosing between traditional and Roth
Set your current marginal rate and an honest estimate of your retirement rate. If retirement is lower, traditional wins; if higher, Roth wins; if equal, they are identical. Early-career savers with rising incomes usually favour Roth. Model the employer side with the 401k Calculator first, since the match outranks this decision entirely.
Valuing the deduction you may be spending
The traditional case only wins if the tax saving is genuinely invested. If the refund is spent, the equal-contribution comparison is the relevant one and Roth wins by $156,562.94. Be honest about which describes you, and check the cash-flow effect with the Paycheck Calculator.
Planning conversions across a career
Rates are not fixed for life. Contributing to traditional in high-earning years and converting to Roth in a low-income year — a career break or early retirement before pensions begin — captures the spread in both directions. Project the balance with the Retirement Calculator.
Methodology & Editorial Standards
Both accounts are grown identically on a monthly grid, because the tax treatment differs and the investment mathematics does not. The equal-contribution comparison taxes the traditional withdrawal at the retirement rate and leaves the Roth untaxed. The equal-after-tax-cost comparison additionally invests the traditional deduction at the same return, which is the economically correct like-for-like basis; note that in practice this side pot would sit in a taxable account and suffer some drag, so the traditional case here is a modest overstatement. Contribution limits, income-based eligibility phase-outs, required minimum distributions and state taxes are not modelled. The engine implements the standard published formula for this calculation. Inputs are validated for domain and sign before evaluation, and any undefined case returns an em-dash rather than a spurious value.
Computation runs in IEEE-754 double precision at full internal precision; rounding to two decimal places occurs strictly at the display layer, so no cumulative drift enters the result. All monetary outputs use accounting presentation — grouped thousands, two decimals, negatives in parentheses — so figures can be transcribed directly into a model or working paper. Division-by-zero and out-of-domain inputs return an em-dash rather than a misleading number.
This engine was reconciled against an independent reference implementation and hand-verified for the worked example above before release. Our full five-stage review process is published on the About Us page.
Disclaimer. This calculator is provided for informational and modelling purposes only and does not constitute financial, tax, legal, medical, or engineering advice. Verify all figures with a qualified professional before acting on them.
IRA Calculator — 20 Expert FAQs
20 analyst-written answers to the questions practitioners actually ask — optimised for voice and answer-engine retrieval.
Is a Roth or a traditional IRA better?
It depends entirely on whether your tax rate in retirement will be higher or lower than it is today. Compared honestly — on equal after-tax cost — they are algebraically identical when the two rates match, and the winner is simply whichever side of that line you fall on.
Why do most calculators say Roth wins?
Because they compare equal contributions, which is not an equal cost. A $7,000 traditional contribution generates a $1,680 refund at a 24% rate; a $7,000 Roth contribution does not. Ignoring that refund silently hands Roth an advantage it has not earned.
What is the break-even tax rate?
Exactly your contribution-time rate — 24% here. If you expect to pay less than 24% in retirement, traditional wins; more, and Roth wins. This is an algebraic identity, not an approximation, and it holds for any return and any horizon.
What if I spend the tax refund instead of investing it?
Then the equal-contribution comparison is the honest one for you, and Roth wins by $156,562.94. This is the strongest practical argument for Roth: it enforces the discipline automatically, and most people do not in fact invest the refund.
Will my tax rate be lower in retirement?
Often, since employment income stops, but not reliably. Large balances, required minimum distributions, pensions and future rate rises all push the other way. Uncertainty itself is an argument for holding both types.
How much can I contribute to an IRA?
The IRS sets an annual limit across all your IRAs combined, with an additional catch-up allowance from age 50. It changes most years. High earners also face income phase-outs on Roth contributions and on the deductibility of traditional ones.
What is a backdoor Roth?
A non-deductible traditional contribution converted promptly to Roth, used by those above the Roth income limit. The pro-rata rule makes it costly if you hold other pre-tax IRA balances, so take advice before attempting it.
When can I withdraw from an IRA?
Generally from 59½. Earlier withdrawals usually attract income tax plus a 10% additional tax — on $50,000 at a 22% rate that is $16,000, or 32% of the amount. Roth contributions, though not earnings, can usually be withdrawn without penalty.
What are required minimum distributions?
Mandatory annual withdrawals from traditional IRAs beginning at the statutory age, which force taxable income whether you need it or not. Roth IRAs have no RMDs during the owner's lifetime, which is a real and often overlooked advantage.
Should I fund an IRA or a 401(k) first?
Contribute enough to the 401(k) to capture the full employer match before anything else, since nothing matches a 50% instant return. Beyond that, an IRA usually offers wider choice and lower fees, so it is often the better home for the next dollar.
How much does starting early matter?
Enormously. The first $7,000 contributed thirty years out becomes $53,285.79 at 7%; the final year's contribution is still $7,000. That is a 7.61x difference for the same money, decided purely by when it went in.
Does this account for inflation?
No, the figures are nominal. Real purchasing power will be substantially lower, and the contribution limit itself is index-linked so future contributions will be larger in nominal terms. Convert with the Inflation Calculator before judging adequacy.
Can I have both a traditional and a Roth IRA?
Yes, though the annual limit applies across both combined. Splitting contributions is a reasonable hedge against tax-rate uncertainty, and it gives you flexibility to choose which account to draw from in any given retirement year.
What return should I assume?
Something defensible for your actual asset allocation, not the best decade you can remember. 7% nominal is a common assumption for an equity-heavy portfolio; a balanced portfolio warrants less. Test the plan at a lower figure before relying on it.
Does the side-pot comparison overstate the traditional case?
Slightly, yes — and deliberately transparently. The invested deduction would sit in a taxable account and suffer some tax drag on dividends and gains, which this engine does not model. The traditional advantage shown here is therefore an upper bound.
Is this ira calculator free to use?
Yes. It is free, requires no account, and has no usage limits. ApexConverter is funded by contextual advertising, never by selling user data.
Is my data sent to a server?
No. The engine runs as Vanilla JavaScript inside your browser under our Zero-Server Client-Side Execution model. Your figures are computed locally and are never transmitted, logged, or stored.
How accurate is this calculator?
It applies the standard closed-form formula in IEEE-754 double precision, rounding only at the display layer. The engine is reconciled against an independent reference implementation before release.
Does it work on mobile?
Yes. The interface is mobile-first with numeric keypad hints and is tested down to a 320-pixel viewport with no horizontal scrolling.
Can I use it offline?
Largely, yes. Because computation is client-side, the page continues to calculate without a network connection once it has loaded.