IRA Results
Account Value at Retirement
$0
Monthly Retirement Income
$0
IRA Analysis
| Metric |
Traditional IRA |
Roth IRA |
Difference |
Understanding Individual Retirement Accounts (IRA)
What is an IRA?
An Individual Retirement Account (IRA) is a tax-advantaged investment account designed to help you save for retirement. IRAs offer significant tax benefits and investment flexibility, making them essential tools for retirement planning alongside employer-sponsored plans like 401(k)s.
Traditional vs Roth IRA
- Traditional IRA: Tax-deductible contributions, taxable withdrawals
- Roth IRA: After-tax contributions, tax-free withdrawals
- Traditional: Required minimum distributions at age 73
- Roth: No required distributions during lifetime
- Income limits apply to Roth IRA eligibility
IRA Contribution Limits
- 2025 contribution limit: $7,000 ($8,000 if age 50+)
- Catch-up contributions for those 50 and older
- Income phase-out limits for deductibility
- Roth IRA income limits for eligibility
- Contribution deadline: Tax filing deadline
IRA Investment Options
- Stocks, bonds, and mutual funds
- Exchange-traded funds (ETFs)
- Certificates of deposit (CDs)
- Real estate investment trusts (REITs)
- Target-date funds for automatic diversification
IRA Withdrawal Rules
- Early withdrawal penalty: 10% before age 59½
- Exceptions for first-time home purchase
- Higher education expense exceptions
- Medical expense and unemployment exceptions
- Required minimum distributions (RMDs) at age 73
IRA Tax Strategies
- Traditional IRA for current tax deductions
- Roth IRA for tax-free retirement income
- Roth conversions for tax diversification
- Backdoor Roth for high-income earners
- Asset location strategies for tax efficiency
How Our IRA Calculator Works
Our IRA calculator uses compound interest formulas to project your retirement account growth based on contributions, investment returns, and time horizon. It compares Traditional and Roth IRA scenarios to help you choose the optimal strategy.
The calculator considers current and future tax rates, contribution limits, and withdrawal rules to provide comprehensive retirement planning insights. Use these projections to optimize your IRA contribution strategy and maximize retirement savings.
$7,000
2025 IRA Contribution Limit
$8,000
Age 50+ Catch-up Limit
59½
Penalty-free Withdrawal Age
73
Required Distribution Age