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IRA Calculator
An IRA calculator projects how a traditional or Roth IRA can grow over time. Enter your current balance, how much you plan to contribute each month or each year, your expected annual return, and how many years you have until retirement, and it estimates your future balance, your total contributions, and the growth on top of them.
Per month or per year, as chosen below.
Traditional: contributions may be tax-deductible now, withdrawals taxed later. Roth: contributions are after-tax, qualified withdrawals are generally tax-free.
Monthly contributions are added each month and grow from the month they are made.
| Starting balance | |
| Total contributions | |
| Investment growth | |
| Future value | |
| IRA type |
How it works
A traditional IRA is a retirement account where your money can grow tax-deferred: you do not pay tax on the growth each year, and you generally pay tax only when you take money out in retirement. Contributions may be tax-deductible, depending on your income and whether you have a workplace retirement plan. That tax-deferred growth is the main reason an IRA can build up so much over a long career, even from modest yearly contributions.
Your current balance is what is already in the account. Your annual contribution is what you plan to add each year; contribution limits change from year to year, so check the current limit before you plan around the maximum. The expected annual return is your assumed average yearly growth, after fees — 7% is a common planning figure for a diversified stock-heavy portfolio, but actual returns vary every year and are never guaranteed. The years until retirement is how long the money stays invested.
The two IRA types grow the same way in this calculator, but they are taxed differently. With a traditional IRA, your contributions may be tax-deductible now and you generally pay tax when you withdraw the money in retirement, so the balance shown here is before tax. With a Roth IRA, you contribute after-tax money and qualified withdrawals in retirement are generally tax-free, so the balance shown is closer to what you can actually spend. Monthly contributions work the same as annual ones, except each monthly payment starts compounding in the month it is made — $500 a month grows to a little more than $6,000 a year paid at year-end, because the early months get extra time to grow.
The formula for the future value has two parts: the growth of your starting balance, and the growth of your yearly contributions, which are assumed to be made at the end of each year:
where r is the annual return as a decimal and n is the number of years. With monthly contributions, the monthly amount compounds at r ÷ 12 for 12 × n months instead.
Compounding does most of the heavy lifting. In the early years your balance grows slowly, because the growth is a percentage of a small amount. Later, the same percentage applies to a much larger balance, so the yearly growth can exceed your yearly contribution. That is why starting early matters more than contributing a large amount late: an extra ten years of compounding can be worth more than doubling your contribution for a shorter period. Remember that this calculator shows growth before tax and before fees, and it assumes a steady return every year, which never happens in real life — use it for planning, not as a promise.
Worked example
Maria is 35 and opens a traditional IRA with a $0 balance. She plans to contribute $6,000 a year and assumes a steady 7% annual return until she retires at 65, which is 30 years away.
Her contributions alone add up to $6,000 × 30 = $180,000. With compounding, the future value is $6,000 × ((1.07)30 − 1) ÷ 0.07. Since 1.0730 is about 7.6123, that is $6,000 × 94.46079 = $566,764.72. So her $180,000 of contributions grows by about $386,764.72 — more than double what she put in, thanks to compounding.
If Maria had waited ten years and contributed for only 20 years, her future value would be about $245,973, even though she would have contributed $120,000. Starting early is worth roughly $320,000 in this comparison, which is why retirement savers are told to start with whatever they can, as soon as they can.
FAQ
What is a traditional IRA?
A traditional IRA is an individual retirement account where your savings can grow tax-deferred. You may be able to deduct contributions from your taxable income now, and you generally pay tax when you withdraw the money in retirement.
How much can I contribute to an IRA each year?
Contribution limits are set by the tax rules and change from year to year, and people aged 50 and over can usually add an extra catch-up amount. Check the current limit for the year you are planning before you set your contribution.
Is a 7% return realistic for an IRA?
Seven percent a year is a common long-run planning figure for a diversified portfolio of stocks, before inflation and fees, but it is only an average. Some years will be higher and some years will be negative, and no return is guaranteed.
When can I withdraw money from an IRA?
You can usually withdraw money without an extra penalty from age 59 and a half, and you must start required withdrawals at the age set by the current rules. Withdrawing earlier can trigger income tax plus a 10% early withdrawal penalty, with a few exceptions.
Does this calculator include tax?
No. This calculator shows the balance before tax. Withdrawals from a traditional IRA are generally taxed as ordinary income in retirement, so the after-tax amount you can spend will be lower.
What is the difference between a traditional and a Roth IRA?
A traditional IRA is usually tax-deferred: contributions may be tax-deductible now and withdrawals in retirement are taxed. A Roth IRA is funded with after-tax money, so qualified withdrawals in retirement are generally tax-free. The balance grows the same way in both; the difference is when the tax is paid.