IRA Calculator - Traditional & Roth IRA Planning

What is an IRA Calculator?

An IRA (Individual Retirement Account) calculator is a powerful financial planning tool that helps you project retirement savings growth, compare Traditional and Roth IRA options, optimize tax strategies, and plan withdrawal strategies. Our advanced calculator includes Monte Carlo simulation, spousal IRA planning, healthcare cost projections, and estate planning features.

Key Features of Our IRA Calculator

• Traditional vs Roth Comparison: Side-by-side analysis of both IRA types
• Monte Carlo Simulation: Run 10,000+ market scenarios for success probability
• Tax Optimization: Calculate optimal conversion strategies and tax savings
• Withdrawal Strategies: Compare 4% rule, RMD, fixed, and dynamic strategies
• Spousal IRA Planning: Coordinate dual IRA contributions and withdrawals
• Healthcare Cost Planning: Project medical expenses with 5-7% inflation
• Estate Planning: Calculate legacy goals and inheritance tax impact
• Investment Fee Analysis: See lifetime impact of fees on your balance

Traditional IRA vs Roth IRA: Which is Better?

Traditional IRA Benefits

• Tax-deductible contributions reduce current taxable income
• Tax-deferred growth until withdrawal
• Ideal if you expect lower tax bracket in retirement
• No income limits for contributions
• Immediate tax savings benefit

Roth IRA Benefits

• Tax-free withdrawals in retirement
• No Required Minimum Distributions (RMDs)
• Tax-free inheritance for beneficiaries
• Contributions can be withdrawn anytime penalty-free
• Ideal if you expect higher tax bracket in retirement

Decision Factors

Choose Traditional IRA if you're in a high tax bracket now and expect lower taxes in retirement. Choose Roth IRA if you're in a lower tax bracket now or expect higher taxes in retirement. Consider your age, income, retirement timeline, and estate planning goals. Many investors use both for tax diversification.

2024 IRA Contribution Limits and Rules

Contribution Limits

Roth IRA Income Limits (2024)

• Single filers: Phase-out $146,000-$161,000
• Married filing jointly: Phase-out $230,000-$240,000
• Above limits: Consider backdoor Roth IRA strategy

Advanced IRA Strategies

Backdoor Roth IRA Conversion

High-income earners can contribute to a Traditional IRA (no income limits) and immediately convert to a Roth IRA. You'll pay taxes on the conversion but gain tax-free growth. This strategy is particularly valuable for those above Roth IRA income limits.

Spousal IRA Strategy

Working spouses can contribute to an IRA for non-working spouses, effectively doubling household contributions to $14,000-$16,000 annually. This strategy maximizes retirement savings for single-income families.

Tax-Loss Harvesting

While IRAs grow tax-deferred, coordinate with taxable accounts for tax-loss harvesting. Place tax-inefficient investments (bonds, REITs) in IRAs and tax-efficient investments (stocks, index funds) in taxable accounts.

IRA Withdrawal Strategies for Retirement

The 4% Rule

Withdraw 4% of your initial balance annually, adjusted for inflation. This strategy historically provides 30+ years of sustainable income with 95% success rate. Our calculator tests this against various market scenarios.

Required Minimum Distributions (RMDs)

Traditional IRAs require RMDs starting at age 73. Calculate using IRS life expectancy tables. Failure to take RMDs results in 25% penalty. Roth IRAs have no RMDs during owner's lifetime.

Dynamic Withdrawal Strategy

Adjust withdrawals based on market performance and portfolio balance. Withdraw more in good years, less in down years. This flexibility can extend portfolio longevity by 5-10 years.