How to Use the Traditional IRA Calculator
- Enter your age, retirement age, balance and planned annual contribution.
- Choose your filing status and enter MAGI.
- Select your workplace plan coverage.
- Enter your current marginal tax rate and expected retirement tax rate.
- Press Calculate.
Formula
Deductible = min(contribution, deduction limit after phase-out) Tax savings = deductible × current marginal rate Pre-tax balance grows monthly at the assumed return After-tax value = balance − (balance − nondeductible basis) × retirement tax rate
Example Calculation
A single filer, 35, covered by a workplace plan with $75,000 MAGI contributes $7,000 a year, which is fully deductible below the phase-out. At a 22% marginal rate that saves $1,540 in year one. With a 7% return until 65 and a $10,000 starting balance, the pre-tax balance is about $758,000; at a 15% retirement tax rate, roughly $645,000 remains after tax.
What Is a Traditional IRA Calculator?
It helps you evaluate a tax-deferred account: how much of a contribution is deductible, how much tax you may save now and how the balance compares to a Roth after future taxes.
Deductibility Rules
If neither you nor your spouse is covered by a workplace retirement plan, your contribution is generally fully deductible. If you are covered, the deduction shrinks and eventually disappears as MAGI passes the phase-out range for your filing status. A different range applies when only your spouse is covered.
Pre-Tax vs After-Tax Thinking
A $100,000 pre-tax balance is not $100,000 of spending power. After withdrawal taxes, it is less. Comparing after-tax values helps you compare a traditional IRA fairly with a Roth.
Tips
- Use the deduction to fund a Roth conversion strategy only after consulting a tax professional.
- Estimate retirement tax rates conservatively.
- Consolidate old IRAs to simplify tracking.
Common Mistakes
- Assuming every contribution is deductible.
- Forgetting Form 8606 for nondeductible contributions.
- Ignoring required minimum distributions in planning.
Estimate current-year taxes with the income tax calculator.