SamCalculator

IRA Calculator

Compare Traditional IRA, Roth IRA, SEP IRA, SIMPLE IRA, and taxable investments to determine the most tax-efficient retirement strategy.

Account Information

Your IRA balance, contribution, and timeline

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Roth and taxable use the after-tax equivalent

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Federal + state combined

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Lower if income drops in retirement

What Is an IRA?

An Individual Retirement Arrangement (IRA) is a U.S. tax-advantaged account designed to help individuals save for retirement outside of an employer-sponsored plan. The four most common types — Traditional, Roth, SEP, and SIMPLE — share the same compound growth engine but differ in who can contribute, when contributions are taxed, and what the IRS does at withdrawal.

This page combines three tools: a side-by-side comparison of Traditional, Roth, SEP, SIMPLE, and a taxable brokerage funded from the same paycheck; a Required Minimum Distribution estimator that uses the post-2022 IRS Uniform Lifetime Table; and a what-if sensitivity analyzer that quantifies how the after-tax retirement value changes when you flex returns, contributions, retirement age, and tax brackets.

How an IRA Works

Tax-advantaged growth

Dividends, interest, and capital gains compound inside the IRA without annual taxation — letting a balance grow significantly larger than an otherwise-identical taxable brokerage over decades.

Contribution tax treatment

Traditional, SEP, and SIMPLE IRA contributions are pre-tax (or deductible), reducing current taxable income. Roth IRA contributions are after-tax; qualified withdrawals are entirely tax-free.

Annual contribution limits

2025: $7,000 to a Traditional or Roth IRA ($8,000 with the 50+ catch-up). SEP IRA: up to 25% of compensation or $70,000. SIMPLE IRA: $16,500 employee deferral ($20,000 with catch-up).

Withdrawal rules

Distributions before age 59½ are generally taxable plus a 10% IRS additional tax, with specific exceptions. Required Minimum Distributions for Traditional IRAs begin at age 73 (75 if born 1960 or later) under SECURE Act 2.0.

Six Ways to Use an IRA Calculator

01

Compare Traditional vs Roth

Side-by-side projections show whether the upfront deduction (Traditional) or the tax-free withdrawal (Roth) produces more spendable retirement income under your specific tax and return assumptions.

02

Quantify the taxable drag

See how much a taxable brokerage lags an IRA over 20–35 years once cap-gains tax is paid every time the account rebalances or distributes.

03

Plan SEP / SIMPLE contributions

Self-employed and small-business owners use SEP and SIMPLE IRAs for much higher limits than personal IRAs — the calculator handles them with the same tax math.

04

Project RMDs

The RMD tab uses the post-2022 IRS Uniform Lifetime Table to project required withdrawals through age 100, including divisor, tax, and net amount per year.

05

Stress-test your plan

The What-If tab varies returns, contribution levels, retirement age, and retirement tax brackets to show the realistic range of outcomes — not a single point estimate.

06

Time Roth conversions

A Roth conversion in a low-income year (gap between work and Social Security) trades current tax at a lower bracket for tax-free retirement income — use the comparison tab with current vs retirement rates flipped to model it.

Best Practices for IRA Planning

  • •Capture the employer 401(k) match first. Free match dollars beat any IRA tax benefit. Only then redirect remaining savings to an IRA.
  • •Use Roth in low-bracket years, Traditional in high-bracket years. The calculator's Compare tab quantifies the trade for any specific tax-rate combination.
  • •Max the IRA before adding to a taxable brokerage. At a 6% return over 30 years, the IRA wrapper alone is worth roughly 15–25% more spendable retirement income.
  • •Don't ignore catch-up contributions at 50+. The extra $1,000 a year for 15 years compounds to roughly $25,000 of additional retirement value at 6% returns.
  • •Avoid early withdrawals. Pre-59½ distributions trigger ordinary income tax plus a 10% IRS penalty — and forfeit decades of compound growth that generally dwarfs the cash taken out.

Why Tax-Advantaged Retirement Accounts Matter

The mathematical advantage of an IRA over a taxable account compounds with every year and every dollar of return. A 6% taxable account that loses 15% of its annual growth to capital-gains tax effectively earns 5.1% — and over 35 years that gap compounds to a final balance roughly 25% smaller than the same dollars in a Roth IRA.

Traditional, SEP, and SIMPLE IRAs add a second layer: contributions reduce current taxable income, so a $7,000 contribution at a 25% marginal rate costs only $5,250 of net take-home pay. The Compare tab on this page models all three account types from the same gross paycheck so you can read the after-tax value side by side rather than compare apples to oranges.

Edge Cases and Tricky Situations

Backdoor Roth IRA

High earners above the Roth income limit can contribute non-deductibly to a Traditional IRA, then convert to Roth — the IRS treats this as legitimate as long as you don't hold pre-tax Traditional balances elsewhere (the pro-rata rule). Form 8606 is required.

SEP IRA self-employed limit

The 25% contribution limit is calculated on net self-employment earnings minus half the self-employment tax, which is closer to 20% of gross schedule-C income — not 25%. Plug your actual deductible amount into this calculator, not 25% of gross revenue.

SIMPLE IRA mandatory employer contribution

Employers either match employee contributions dollar-for-dollar up to 3% of compensation, or contribute 2% of compensation regardless of whether the employee defers. This is required, not optional.

Roth IRA 5-year rule

Earnings withdrawn from a Roth IRA before age 59½ AND before five years from the first contribution year may be taxed and penalized. Each Roth conversion starts its own 5-year clock for the converted amount.

Inherited IRA 10-year rule

Non-spouse beneficiaries of IRAs from owners who died after 2019 generally must fully drain the account within 10 years (SECURE Act). Spousal beneficiaries have more flexible options.

Pro-rata rule on conversions

If you hold both pre-tax and after-tax dollars in any Traditional IRA, every Roth conversion is treated proportionally — you can't cherry-pick the after-tax basis. Roll pre-tax balances to a 401(k) first to isolate the after-tax piece.

Core Formulas

Traditional IRA Future Balance

FVₙ = (FVₙ₋₁ + Cₙ) × (1 + r)

Each year, the prior balance plus this year's pre-tax contribution Cₙ is grown at the expected return r. The contribution is the full gross because Traditional contributions are deductible.

Roth IRA Future Balance

FVₙ = (FVₙ₋₁ + Cₙ × (1 − tax_now)) × (1 + r)

Roth contributions are after-tax, so the same gross paycheck contributes only Cₙ × (1 − current tax rate). The trade-off: 100% of the final balance is tax-free at withdrawal.

Taxable Brokerage with Cap-Gains Drag

FVₙ = FVₙ₋₁ + Cₙ_after + r × (FVₙ₋₁ + Cₙ_after) × (1 − cg_rate)

Each year's growth is taxed at the long-term capital-gains rate cg_rate, leaving only (1 − cg_rate) of the gain inside the account.

Traditional After-Tax Withdrawal

After-Tax = FV × (1 − tax_later)

All Traditional IRA distributions are taxed as ordinary income at your retirement bracket tax_later. To compare apples-to-apples with Roth, multiply the pre-tax balance by (1 − retirement tax rate).

Required Minimum Distribution

RMD = Prior-Year-End Balance ÷ Divisor

The divisor comes from the IRS Uniform Lifetime Table. A 73-year-old uses 26.5; an 85-year-old uses 16.0. Missing an RMD triggers a 25% IRS excise tax (reduced to 10% if corrected promptly).

Common IRA Mistakes

  • •Picking Roth solely because it sounds simpler — when you're currently in a higher bracket than you'll face in retirement, Traditional is mathematically better.
  • •Missing the IRA contribution deadline (April 15 of the following year) and forfeiting a year of tax-advantaged growth.
  • •Pulling early withdrawals without modeling the lifetime opportunity cost — the 10% IRS penalty is the small part of the loss; the bigger loss is decades of compound growth.
  • •Forgetting the pro-rata rule when attempting a backdoor Roth conversion while holding pre-tax balances elsewhere.
  • •Cashing out a former employer's 401(k) at job change instead of rolling it into an IRA — triggers immediate tax and penalty plus a permanent compounding loss.
  • •Missing an RMD after age 73 and triggering a 25% IRS excise tax on the shortfall.

Important Disclaimers

  • •Projections assume constant inputs over decades. Real contributions, returns, inflation, and tax brackets vary year to year.
  • •IRA contribution limits, RMD ages, IRS lifetime tables, and eligibility rules change with legislation. Always verify the latest IRS Publication 590-A and 590-B before acting on a projection.
  • •Estimates do not guarantee future returns; markets can and do drop. Sequence-of-returns risk matters most in the years immediately before and after retirement.
  • •This tool is for educational use only and is not tax, legal, or investment advice. Consult a fiduciary financial planner, CPA, or qualified tax professional.

Frequently Asked Questions

An Individual Retirement Arrangement (IRA) is a U.S. tax-advantaged account designed for retirement savings outside an employer plan. The four common types — Traditional, Roth, SEP, and SIMPLE — share the same compound growth engine but differ in contribution eligibility, tax timing, and withdrawal rules. The IRS sets annual contribution limits ($7,000 for personal Traditional/Roth in 2025; $8,000 with 50+ catch-up) and specifies when distributions are taxable.

Traditional IRA contributions are pre-tax (often deductible from current taxable income) and grow tax-deferred; withdrawals at retirement are taxed as ordinary income. Roth IRA contributions are after-tax; qualified withdrawals — generally after age 59½ and after the account has been open at least five years — are entirely tax-free. Choose Roth if you expect a higher tax bracket in retirement, Traditional if lower.

Qualified Roth IRA withdrawals are 100% federally tax-free. To qualify, the account must have been open at least five years and you must be at least 59½ (or meet a specific exception — first-home purchase up to $10,000, disability, death). Contributions can always be withdrawn tax- and penalty-free at any age; only earnings are subject to the five-year rule and age 59½ requirement.

For 2025: $7,000 to a Traditional or Roth IRA ($8,000 with the 50+ catch-up). SEP IRA limits are up to 25% of net self-employment compensation or $70,000, whichever is lower. SIMPLE IRA: $16,500 employee deferral ($20,000 with the 50+ catch-up). SECURE Act 2.0 adds a higher catch-up of $5,250 for ages 60–63 starting in 2025 for SIMPLE plans.

Yes — you can hold any number of Traditional, Roth, SEP, or SIMPLE IRAs at different institutions. However, the IRS annual contribution limit applies in aggregate across all your Traditional and Roth IRAs combined: $7,000 ($8,000 with catch-up) for 2025. SEP and SIMPLE limits are separate from personal Traditional/Roth limits.

A Simplified Employee Pension (SEP) IRA is a low-paperwork retirement plan for self-employed individuals and small-business owners. The employer (often the same person, when self-employed) contributes up to 25% of compensation or $70,000 (2025), whichever is lower. SEP contributions are deductible to the business and grow tax-deferred. There are no catch-up contributions for SEP IRAs.

A Savings Incentive Match Plan for Employees (SIMPLE) IRA is for small businesses with 100 or fewer employees. Employees can defer up to $16,500 (2025) of salary. Employers are required to either match employee contributions dollar-for-dollar up to 3% of pay, or contribute 2% of pay to every eligible employee whether they defer or not. The employer contribution is non-negotiable, not optional.

Under SECURE Act 2.0, Required Minimum Distributions begin at age 73 for those born 1951–1959 and at age 75 for those born in 1960 or later. The first RMD is due by April 1 of the year after you reach the starting age; every subsequent RMD by December 31 of its own year. RMDs apply to Traditional, SEP, and SIMPLE IRAs but not Roth IRAs during the original owner's lifetime.

Yes, but pre-59½ Traditional IRA distributions are taxable as ordinary income plus a 10% IRS additional tax under IRC §72(t). Several exceptions waive the 10%: first-time home purchase up to $10,000, qualifying higher education expenses, total/permanent disability, qualifying medical expenses, substantially equal periodic payments (Rule 72(t)), birth or adoption ($5,000 limit), and others. Roth contributions can always come out tax- and penalty-free.

It depends on your current and projected retirement tax brackets, income source (W-2 vs self-employed), and employer plan availability. Most W-2 employees should: first capture any employer 401(k) match, then max a Roth or Traditional IRA based on which bracket comparison favors them, then return to the 401(k) for any remaining savings. Self-employed individuals often benefit most from a SEP IRA because of the much higher contribution limit. Use the Compare tab on this page to see the after-tax result for your specific numbers.

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