IRA Calculator
30
65
$
7.00%
$
22%
Balance at Retirement$1,050,615.18
Tax-Deferred Savings$805,615.18
After-Tax Value$819,479.84
A traditional IRA lets your contributions grow tax-deferred until you withdraw them in retirement. This calculator projects the account balance at your retirement age from a current balance plus annual contributions compounding monthly, then estimates the after-tax value once your expected retirement tax rate is applied. It also isolates the tax-deferred growth, the earnings that accumulate on top of what you actually paid in.
Formula
Balance = B(1+r/12)^m + (C/12)·[((1+r/12)^m − 1)/(r/12)]; after-tax = balance × (1 − tax)
- B
- Current IRA balance
- C
- Annual contribution (deposited as C/12 monthly)
- r
- Expected annual return as a decimal
- m
- Months to retirement = (retirement age − current age) × 12
- tax
- Expected tax rate at retirement (as a decimal)
How it works
- Enter your current age, retirement age, annual contribution, expected annual return, current balance, and the tax rate you expect to pay in retirement.
- The annual contribution is spread into monthly deposits and compounded monthly alongside your existing balance until retirement age, producing the projected balance.
- The calculator subtracts your total contributions from that balance to show tax-deferred growth, and multiplies the balance by one minus your retirement tax rate to estimate the after-tax value.
Worked example
Age 30 retiring at 65, $7,000/yr contribution, 7% return, $20,000 current balance, 22% retirement tax rate.
- Months to retirement: (65 − 30) × 12 = 420; monthly rate = 0.07 ÷ 12; monthly contribution = 7,000 ÷ 12 ≈ $583.33.
- Grow balance and contributions over 420 months to a projected $1,280,738.22.
- Total contributions: 20,000 + 7,000 × 35 = $265,000, so tax-deferred growth = 1,280,738.22 − 265,000 = $1,015,738.22.
- After-tax value: 1,280,738.22 × (1 − 0.22) = $998,975.81.
Projected balance about $1,280,738.22, tax-deferred growth $1,015,738.22, and an after-tax value of about $998,975.81.
Frequently asked questions
- How is a traditional IRA taxed?
- Contributions are often tax-deductible and the account grows tax-deferred, but withdrawals in retirement are taxed as ordinary income. That is why this calculator applies your expected retirement tax rate to estimate the after-tax value.
- What is the difference from a Roth IRA?
- A traditional IRA defers taxes until withdrawal, while a Roth IRA is funded with after-tax dollars and qualified withdrawals are tax-free. This tool models the traditional account, so it applies a tax rate to the ending balance.
- What does tax-deferred growth represent?
- It is the portion of your balance that comes from investment earnings rather than your own deposits, computed as the projected balance minus total contributions. Those earnings compound untaxed until you withdraw them.
- Does this account for contribution limits or RMDs?
- No. The projection assumes you contribute the amount you enter every year and does not enforce annual IRS limits or model required minimum distributions. Verify current limits separately when planning contributions.