IRA Calculator

IRA Calculator – Roth vs Traditional, Growth & Contribution Limits

An Individual Retirement Account (IRA) is one of the most flexible and powerful tools available for long-term financial planning. Whether you live in the United States and use IRS-regulated Roth and Traditional IRAs, or live in a country with a similar tax-advantaged retirement system, understanding how contributions, tax treatment, and compounding growth work is essential for building a secure financial future.

This IRA Calculator helps you compare Roth vs Traditional tax outcomes, project long-term growth using adjustable contribution and return assumptions, and estimate your allowable contribution limit for the year based on age, income, and optional phase-out rules. It combines the most important retirement-planning concepts into one clean, mobile-friendly tool so you can evaluate your strategy with clarity and confidence.

This guide explains how IRAs work, how Roth and Traditional IRAs differ, how growth projections are calculated, how contribution limits work globally and in the U.S., and how to use this calculator to model your long-term retirement strategy.

What Is an IRA?

An IRA (Individual Retirement Account) is a tax-advantaged account designed to help individuals save and invest for retirement. While the specific rules vary by country, most IRAs share common features:

• Contributions may reduce your taxable income (pre-tax or deductible contributions).
• Investments grow tax-deferred or tax-free depending on account type.
• Withdrawals have specific rules, often tied to age, retirement status, or local tax laws.
• Contribution limits often depend on age, income, or overall tax policy.

In the United States, there are two primary forms of IRAs:

• Traditional IRA: Contributions may be tax-deductible. Growth is tax-deferred and withdrawals are fully taxable in retirement.
• Roth IRA: Contributions are made with after-tax money. Growth and qualified withdrawals are tax-free.

Other countries may refer to tax-advantaged retirement accounts under different names—such as RRSP (Canada), SIPP (UK), Superannuation (Australia), Provident Funds (UAE, Singapore), or Private Pension Plans (EU)—but the underlying principles of tax-deferred or tax-free compounding are remarkably similar.

How the IRA Calculator Helps You

This calculator is designed to support three core tasks:

• 1. IRA Growth Projection: Model how your retirement savings grow over time under different return rates and contribution scenarios.
• 2. Roth vs Traditional Comparison: Evaluate which structure may benefit you more based on tax today vs tax in retirement.
• 3. Contribution Limit Helper: Enter your age, income, and local contribution rules to estimate your maximum allowable IRA contribution.

Because the system is flexible, it works both for users in the U.S. following IRS rules and for users globally whose tax authorities impose different age thresholds, contribution limits, or income-based restrictions.

How IRA Growth Projection Works

The IRA Growth Projection tool helps you calculate how your balances may grow over time. You can enter your current balance, annual or monthly contributions, expected annual return rate, and years until retirement.

The model uses a future value formula that accounts for:

• Compounding of your existing balance
• Compounding of recurring contributions
• The frequency of contributions (monthly or annual)
• Total investment time horizon

• P = Starting balance
• PMT = Contribution per period
• r = Return rate per period
• n = Total periods

This calculation helps you visualize the power of compounding over the long term. Even small monthly contributions can grow into meaningful retirement balances when compounded over decades.

Investment Return Assumptions

Investment returns depend on your asset allocation—stocks, bonds, mutual funds, ETFs, rollovers, or socially responsible investments. Historically:

• Diversified stock portfolios return ~6–10% annually over long periods.
• Bond-heavy portfolios return ~2–5%.
• Cash-equivalent portfolios return ~1–3%.

Your rate of return may vary year to year, but modeling long-term averages helps you make reasonable retirement projections.

Roth vs Traditional IRA – Tax Strategy Comparison

The Roth vs Traditional comparison is one of the most important features of this calculator. The tax treatment of contributions and withdrawals can dramatically impact your long-term results.

Traditional IRA (Pre-Tax)

• Contributions may reduce taxable income today.
• Growth is tax-deferred until you withdraw.
• Withdrawals are taxed as ordinary income.
• Required Minimum Distributions (RMDs) typically begin at age 73 (U.S.).

Roth IRA (After-Tax)

• Contributions are made with after-tax money.
• Growth is completely tax-free.
• Qualified withdrawals are tax-free.
• No RMDs (U.S.), making Roth IRAs especially powerful for estate planning.

When a Roth IRA May Be Better

• You expect your retirement tax rate to be the same or higher than today.
• You want tax-free withdrawals and flexibility in retirement.
• You want to avoid RMDs or leave assets to heirs tax-free.
• You are early in your career and in a lower tax bracket.

When a Traditional IRA May Be Better

• You expect your retirement tax rate to be lower than today.
• You want a tax deduction now to reduce taxable income.
• You need immediate tax savings to improve cash flow.
• You are in a high-income year temporarily.

The comparison tool factors in your current tax rate and your expected retirement tax rate to show:

• Roth IRA balance at retirement
• Traditional IRA balance at retirement
• After-tax value of the Traditional IRA
• Estimated tax savings today from Traditional contributions
• A simple verdict on which appears more favorable

Why Tax Rates Matter

The key decision between Roth and Traditional IRA strategies often comes down to whether you want to pay taxes now or later. Specifically:

• If today’s tax rate is low and the future rate is likely higher → Roth tends to win.
• If today’s tax rate is high and the future rate is likely lower → Traditional tends to win.

This calculator simplifies the evaluation by running both scenarios using your input values.

Contribution Limits – U.S. and Global Hybrid Approach

The Contribution Limit Helper is designed to work both for U.S. IRS rules and retirement contribution rules in other countries. As a hybrid calculator, it allows you to enter:

• Your country or region
• Your age
• Your annual income
• Your base contribution limit from your tax authority
• Your catch-up age threshold and catch-up amount
• Optional phase-out start and end values

This means you can use the calculator for:

• U.S. IRAs (Roth, Traditional)
• Canada’s RRSP or TFSA (with adjusted values)
• U.K. SIPPs and ISAs (with relevant limits)
• Australia’s Superannuation (voluntary contributions)
• EU personal pension accounts
• Any country with retirement contribution caps

Understanding U.S. Contribution Limits (for U.S. Users)

For 2025, IRS contribution rules include:

• Under age 50: $7,000 contribution limit.
• Age 50+: $8,000 with catch-up contribution.

Income phase-out ranges apply only to Roth IRA eligibility, not Traditional IRA contributions (though deductibility may be limited).

Understanding Global Contribution Rules (for Non-U.S. Users)

Outside the U.S., retirement account rules vary significantly:

• Some countries base contribution limits on income percentage.
• Others impose flat annual contribution caps.
• Some systems provide matching or tax credits.
• Some countries restrict access until retirement age.

The Contribution Limit Helper is flexible enough to handle all these scenarios when you supply your local numbers.

How Income Phase-Out Works

If a country or tax authority reduces retirement contribution limits at higher incomes, you can model it by entering the phaseout start and end values. The calculator then:

• Determines whether you fall inside the phaseout range
• Calculates the reduction proportionally
• Displays your adjusted maximum contribution limit

This hybrid approach works for:

• Roth IRA income limits (U.S.)
• Income-based pension reductions (Canada, U.K., EU)
• Means-tested schemes in many countries

Why IRA Contribution Limits Matter

Understanding contribution limits helps ensure:

• You maximize tax-advantaged savings
• You avoid over-contributing and triggering penalties
• You plan contributions accurately based on your age
• You stay compliant with tax authority rules
• You calculate long-term growth more precisely

A Practical Example

Scenario: U.S.-Based Saver

A 35-year-old earning $70,000 per year wants to maximize IRA contributions. With a $6,500 limit and no catch-up eligibility, the calculator confirms their base limit and shows no phase-out applies.

Scenario: Global Saver

Someone in the U.K. using a SIPP enters:

• Country: United Kingdom
• Base limit: £60,000
• Income phase-out: £260,000–£360,000

The calculator reduces contributions accordingly, matching U.K. tapering rules when triggered.

Using the IRA Calculator Correctly

To get accurate projections:

• Ensure your contribution limit matches your country’s rules.
• Use realistic return assumptions (5–8% long-term models).
• Check your tax rates when comparing Roth vs Traditional.
• Model several scenarios to understand sensitivity to income or returns.

Summary: Build a Smarter Retirement Strategy

IRAs represent one of the most tax-efficient ways to grow wealth for retirement—whether you’re using U.S. Roth and Traditional IRAs or similar retirement accounts around the world. This IRA Calculator combines growth modeling, tax comparison, and contribution limit estimation to help you make informed decisions at every stage of your financial journey.

Use this tool to evaluate tax strategies, model future balances, and understand how much you can contribute this year. With clear visuals and flexible options, it provides a strong foundation for planning a confident and secure retirement.