Methodology
The calculator compounds your current IRA balance and future contributions monthly using the annual return you provide. Contribution caps follow the selected IRS year; enable the cap toggle to limit annual deposits.
Formulas
Monthly rate: \( i = (1+r)^{1/12} - 1 \)
Future value of balance: \( FV_{0} = B_0 (1+i)^n \)
Future value of contributions: \( FV_{c} = PMT \cdot \frac{(1+i)^{n}-1}{i} \)
Traditional IRA after tax: \( FV_{\text{net}} = FV \cdot (1 - t_{\text{ret}}) \)
How to Use
- Choose Traditional or Roth and enter your age, retirement age, and current balance.
- Provide annual contributions and optional IRS cap year.
- Set expected annual return and marginal tax rates.
- Review projected balance, earnings, tax savings, and after-tax value.
Frequently Asked Questions
Does the calculator distinguish Traditional vs Roth?
Yes. Traditional IRA balances are reduced by your retirement tax rate. Roth balances remain tax-free and show “N/A” for tax savings.
How accurate are the projections?
They assume constant monthly contributions and constant returns. Actual market performance and IRS limits may change.
Can I model catch-up contributions?
Yes. If you are age 50 or older, the IRS cap automatically includes catch-up amounts for the selected year.