Traditional IRA Calculator
A traditional IRA defers tax rather than removing it. Contributions may be deductible now, growth is untaxed along the way, and withdrawals are taxed as ordinary income. This shows both the headline balance and what you would actually keep.
Your inputs
Your result
Formula
Deferral is not exemption
The balance shown on a traditional IRA statement is a pre-tax figure. Every dollar of it will be taxed as ordinary income when withdrawn. Comparing that number directly against a Roth balance, which is already yours, overstates the traditional account by exactly the tax rate.
The bet you are making
A traditional account wins if your tax rate in retirement is lower than it is now. That is common: many people retire on less than their peak earning income, and drawing income across brackets can produce a lower effective rate. It is not universal — a large balance, other pension income, or higher future tax rates can push it the other way.
Required minimum distributions
Traditional IRAs eventually force withdrawals whether you need the money or not, starting at an age set by legislation that has moved more than once. Those distributions are taxable and can push you into a higher bracket, which is a genuine downside relative to a Roth.
Deduction eligibility has conditions
Whether your contribution is deductible depends on income and on whether you or a spouse are covered by a workplace plan. Above certain income levels the deduction phases out entirely, at which point a traditional IRA offers deferral without the upfront benefit.
Frequently asked questions
How much can I contribute to an IRA?
The IRS sets an annual limit across all your IRAs combined, with an additional catch-up amount from age fifty. It is adjusted periodically, so check the current year's figure.
Traditional or Roth IRA?
Traditional if you expect a lower tax rate in retirement, Roth if you expect the same or higher. When genuinely unsure, holding some of each hedges the risk.
Can I have both an IRA and a 401(k)?
Yes. The contribution limits are separate, though your ability to deduct traditional IRA contributions may be reduced if you are covered by a workplace plan and your income is above the threshold.
What if I withdraw early?
Withdrawals before the qualifying age generally incur income tax plus an additional penalty, with a limited set of exceptions.