IRA Calculator (Traditional vs Roth)
Enter your age, estimated income (MAGI), and annual contribution to project your U.S. IRA (Traditional IRA or Roth IRA) balance at retirement, including any reduction to your contribution or deduction from income limits.
What is an IRA (Individual Retirement Account)?
An IRA (Individual Retirement Account) is one of the two main tax-advantaged retirement savings vehicles in the U.S., alongside the employer-sponsored 401(k). Unlike a 401(k), which requires an employer plan, an IRA can be opened individually at a brokerage or bank, letting you keep contributing regardless of job changes or employment status.
This tool projects your IRA balance year by year through your planned retirement age, based on your current age, contribution amount, and expected return. You can compare a Traditional IRA, which offers an upfront tax deduction, against a Roth IRA, whose contributions are made with after-tax dollars but grow tax-free — and the calculator also accounts for the MAGI-based income limits that can reduce Roth eligibility or Traditional deductibility.
How to use this tool
- Enter your current age and planned retirement age These determine how many years of contributions are simulated
- Enter your current IRA balance and desired annual contribution If your desired contribution exceeds the IRS limit, it will be capped automatically
- Choose an account type (Traditional or Roth) Pick based on whether you want an upfront deduction or tax-free withdrawals in retirement
- Enter your filing status and MAGI Roth IRA eligibility and Traditional IRA deductibility can both be reduced depending on your filing status and MAGI
- Select your workplace plan coverage Whether you or your spouse are covered by a 401(k) or similar plan affects whether Traditional IRA deductions are limited
Tips for getting more out of it
- Roth IRA contributions are restricted at higher incomes, but Traditional IRA contributions themselves have no income limit — only the tax deduction is limited. You can still contribute to a Traditional IRA even at a high income; you just may not be able to deduct all of it.
- The deadline to contribute to an IRA for a given tax year is not December 31, but the following year's tax filing deadline (typically mid-April). You can make a contribution for the prior year right up until that deadline.
- The expected annual return in this tool is a simplified long-term average assumption. Actual investment performance varies significantly from year to year due to market conditions.
- Calculating MAGI precisely can be complicated. Before making contribution decisions, it is recommended to verify your figures against your tax return or the latest IRS guidelines.
Common use cases
Check if you can contribute directly to a Roth IRA at a higher income
See whether your MAGI falls within the phase-out range, and consider a backdoor Roth if you are ineligible
Check if your Traditional IRA deduction is limited
If you are covered by a 401(k) at work, only part of your contribution may be tax-deductible depending on your income
Plan your total retirement savings alongside a 401(k)
Combine this with money.wealth.401k_calculator to estimate your combined balance across multiple retirement accounts
Glossary
- MAGI (Modified Adjusted Gross Income)
- Your Adjusted Gross Income (AGI) with certain deductions, such as student loan interest, added back. MAGI is used to determine IRA contribution and deduction income limits.
- Phase-out
- A range of income within which your allowed contribution or deduction gradually decreases as income rises — full at the low end of the range, and zero once income reaches the high end.
- Traditional IRA
- An account type where contributions may be tax-deductible (subject to income limits), reducing your current tax bill, but withdrawals in retirement are taxed as ordinary income.
- Roth IRA
- An account type funded with after-tax dollars, so there is no upfront tax deduction, but qualified withdrawals in retirement — including investment earnings — are tax-free. Direct contributions are not allowed above certain MAGI thresholds.
- Catch-up contribution
- An additional contribution allowed for individuals age 50 and over, on top of the standard limit. For 2026, this adds $1,100 to the base limit.
- Backdoor Roth
- A strategy used by high earners who are ineligible to contribute directly to a Roth IRA: they contribute to a Traditional IRA first, then convert those funds to a Roth IRA. This can trigger tax consequences, so consulting a tax professional is recommended.
Frequently asked questions
Side Note — The IRA was born in 1974, alongside a landmark pension law
The IRA was created by the Employee Retirement Income Security Act of 1974 (ERISA), a law passed in response to a series of high-profile pension failures that left workers without the retirement benefits they had been promised. Alongside new protections for employer pension plans, ERISA introduced the IRA as a self-directed retirement savings option for workers who had no access to an employer-sponsored plan at all.
The original IRA allowed only a modest $1,500 in annual contributions. Over the following decades, Congress raised the limit repeatedly, and in 1997 introduced the Roth IRA — named after Senator William Roth, who chaired the Senate Finance Committee at the time — offering a fundamentally different tax treatment. Being able to choose between paying tax now (Traditional) or later (Roth) was a genuinely novel piece of policy design, letting individuals tailor their retirement savings to their own expectations about future tax rates.
Japan's individual-type defined contribution pension (iDeCo) shares a similar philosophy, letting participants choose their own investments while receiving tax advantages. However, the details differ meaningfully: iDeCo funds generally cannot be withdrawn before age 60, and contribution limits vary in finer detail depending on one's occupation and whether an employer pension plan is also available.