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Which is better, a Traditional IRA or a Roth IRA? Traditional IRAs offer tax-deferred earnings and tax-deductible contributions. Roth IRAs offer tax-free earnings, but contributions are not deductible.
All fields are required.
Current Traditional IRA amount
Current tax bracket
Retirement tax bracket
Estimated investment rate of return
How much do you plan to save each year
Amount saved is
Before TaxAfter Tax
Maximum IRA sheltered contribution
How many years until you retire
Details
Traditional IRA
Roth IRA
Sheltered
$119,694.53
$95,062.16
Non-sheltered
$6,486.04
$0.00
Total before taxes
$126,180.57
Total after taxes
$108,226.39
Calculator results detail
When you invest money in a Roth IRA account, you pay taxes on your investment today, but you do not pay taxes when you withdraw the funds. If you convert your Traditional IRA account to a Roth IRA account today, you would pay $2,800.00 in taxes. To keep the comparison fair, the non conversion figure assumes you take the same amount and place it in a non-sheltered account until you retire.
From annual contributions
Total contribution before taxes
$3,000.00
Sheltered IRA contribution, before taxes
Sheltered IRA contribution, after taxes
$2,160.00
Non-sheltered contribution, before taxes
Non-sheltered contribution, after taxes
Total tax sheltered IRA, at retirement
$87,972.84
$63,340.47
Total non-sheltered, at retirement
From IRA conversion
Total amount to convert
$10,000.00
Tax due on conversion
$2,800.00
$31,721.69
Calculator tips
This calculator uses annual compounding. Annual deposits start today and the final withdrawal amount is available one year after the last deposit.
The after tax amount assumes that the Roth balance is taxed at retirement date, rather than as the funds are withdrawn.
Your actual qualifying contribution may differ significantly from the amounts listed above (for reasons such as income, filing status, employer benefits, and more). We strongly recommend that you consult your tax advisor before contributing to a retirement program. Qualifying contributions are usually limited as follows:
* Beginning in 2009, the contribution limit will adjust annually for inflation in $500 increments.
If you are age 50 or over, you may qualify for an additional catch-up contribution as follows:
Your actual qualifying contribution may differ significantly from the amounts listed above (for reasons such as income, filing status, employer benefits, and more). We strongly recommend that you consult your tax advisor before contributing to a retirement program.
Calculator disclaimer
The information provided by these calculators is intended for illustrative purposes only and is not intended to purport actual user-defined parameters. The default figures shown are hypothetical and may not be applicable to your individual situation. Be sure to consult a financial professional prior to relying on the results.
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