Saving for a comfortable retirement is one of the most common financial goals among
working people. One possible retirement savings vehicle is the IRA. Even if you have
access to an employer-sponsored retirement plan, you may still be eligible to supplement
your employer’s plan by contributing to a tax-deductible IRA or a Roth IRA. This
calculator is designed to help you determine whether you qualify for the different
types of IRAs and to estimate the potential future value of each type of IRA for
which you are eligible.
Your Results
You can see below, and on the following pages, the types of IRAs you are eligible to make contributions to. If your income exceeds certain levels, you may qualify for a partial deduction (or no deduction) on your contribution to a traditional IRA, or you may be ineligible or only partially eligible for a Roth IRA. If that is the case, you can still consider making nondeductible contributions to a traditional IRA.
Are you eligible for a nondeductible IRA?
0.00
Your maximum annual contribution:
$0.00
After-tax value of nondeductible IRA when withdrawals begin:
$0
Estimated annual income from nondeductible IRA:
$0.00
Your Results (continued)
Are you eligible for a deductible IRA?
0.00
Your maximum annual contribution:
$0.00
After-tax value of deductible IRA when withdrawals begin:
$0.00
Estimated annual income from deductible IRA:
$0.00
Your Results (continued)
Are you eligible for a Roth IRA?
0.00
Your maximum annual contribution:
$0.00
After-tax value of Roth IRA when withdrawals begin:
$0.00
Estimated annual income from Roth IRA:
$0.00
Are you eligible for more than one type of IRA account? If so, you may need to choose which account is appropriate for you. In some cases, you may have more than one type of IRA account. You should be aware that no matter how many different IRA accounts you have, your total contributions to all IRAs in a single year may not exceed $6,500. In addition, individuals aged 50 and older may make an additional $1,000 "catch-up" contribution, bringing the total contribution limit to $7,500. This calculator assumes maximum contributions, including "catch-up" contributions for those age 50 and older.
The chart below illustrates the differences in after-tax income for Roth, deductible, and nondeductible IRAs using the values you entered.
Estimated Total After-Tax Income from Different IRAs
The information provided is not specific investment advice, a guarantee of performance,
or a recommendation. Rates of return will vary over time, particularly for long
term investments. Investments offering the potential for higher rates of return
also involve a higher degree of risk.
Note that withdrawals from deductible and nondeductible traditional IRAs are subject
to ordinary income taxes and if withdrawn prior to age 59½ may be subject to
an additional 10 percent federal income tax penalty (for nondeductible traditional
IRAs, only the portion of the withdrawal attributable to earnings is taxable). To
qualify for the tax-free and penalty-free withdrawal of earnings, a Roth IRA must
be in place for at least five tax years and the distribution must take place after
age 59½ or due to death, disability, or a first-time home purchase (up to a $10,000
lifetime limit). To the extent that they exceed total contributions, non-qualified
distributions are subject to a 10 percent federal income tax penalty and are includable
in gross income.
This hypothetical example is used for illustrative purposes only. Actual results will vary.
This information is not intended as tax, legal, investment, or retirement advice or recommendations, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek advice from an independent tax or legal professional. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security.
//<![CDATA[
var Formula = 'f = f / 100; i = i / 100; j = j / 100; switch (e) { case 1: e = "s"; break; case 2: e = "h"; break; case 3: e = "ms"; break; default: e = "mj"; break; } var agi_f_0 = 2900; var agi_f_1 = 6500; var agi_f_2 = 7500; var agi_f_3 = 10000; var agi_f_4 = 15000; var agi_f_5 = 20000; var agi_f_6 = 73000; var agi_f_7 = 73000; var agi_f_8 = 83000; var agi_f_9 = 116000; var agi_f_10 = 136000; var agi_f_11 = 136000; var agi_f_12 = 153000; var agi_f_13 = 218000; var agi_f_14 = 228000; var I51 = c === 0 ? "Yes" : d <= agi_f_13 ? "Yes" : d < agi_f_14 ? "Partial" : "No"; var H51 = b === 0 ? I51 : d <= agi_f_9 ? "Yes" : d < agi_f_11 ? "Partial" : "No"; var H52 = d <= agi_f_13 ? "Yes" : d < agi_f_14 ? "Partial" : "No"; var G51 = d <= 0 ? "Yes" : d < agi_f_3 ? "Partial" : "No"; var G52 = d <= 0 ? "Yes" : d < agi_f_3 ? "Partial" : "No"; var F51 = b === 0 ? "Yes" : d <= agi_f_7 ? "Yes" : d < agi_f_8 ? "Partial" : "No"; var F52 = d <= agi_f_10 ? "Yes" : d 70 ? "No" : "Yes"; var D51 = D50 === "No" ? "No" : e === "s" ? F51 : e === "h" ? F51 : e === "ms" ? G51 : H51; var D52 = D51 === "No" ? "No" : D51 === "Partial" ? "Partial" : e === "s" ? F52 : e === "h" ? F52 : e === "ms" ? G52 : H52; var F45 = a > 70 ? "No" : c === 0 ? "Yes" : D52; var p = b === 0 ? F45 : D52; var l = a > 70 ? "No" : "Yes"; var F36 = a < 50 ? agi_f_1 - ((d - agi_f_6) / agi_f_3) * agi_f_1 : agi_f_2 - ((d - agi_f_6) / agi_f_3) * agi_f_2; var F37 = a < 50 ? agi_f_1 - ((d - agi_f_10) / agi_f_4) * agi_f_1 : agi_f_2 - ((d - agi_f_10) / agi_f_4) * agi_f_2; var H36 = a < 50 ? agi_f_1 - ((d - agi_f_9) / agi_f_5) * agi_f_1 : agi_f_2 - ((d - agi_f_9) / agi_f_5) * agi_f_2; var H37 = a < 50 ? agi_f_1 - ((d - agi_f_13) / agi_f_3) * agi_f_1 : agi_f_2 - ((d - agi_f_13) / agi_f_3) * agi_f_2; var G36 = d < agi_f_0 ? d : a < 50 ? (agi_f_3 - d) / agi_f_3 * agi_f_1 : (agi_f_3 - d) / agi_f_3 * agi_f_2; var E36 = e === "s" ? F36 : e === "h" ? F36 : e === "ms" ? G36 : H36; var E37 = e === "s" ? F37 : e === "h" ? F37 : e === "ms" ? G36 : H37; var M36 = l === "No" ? 0 : d < agi_f_1 ? d : agi_f_1; var M37 = l === "No" ? 0 : d agi_f_1 ? agi_f_1 : d; var M41 = t === "No" ? 0 : t === "Partial" ? E37 : d > agi_f_2 ? agi_f_2 : d; var L7 = a < 50 ? M36 : M37; var u = a agi_f_13 ? u : E36; var G8 = c === 0 ? L7 : d > agi_f_3 ? u : E36; var G9 = c === 0 ? L7 : d > agi_f_10 ? u : E36; var G10 = e === "s" ? G9 : e === "h" ? G9 : e === "MS" ? G8 : G7; var M11 = p === "No" ? 0 : p === "Partial" ? E36 : d > agi_f_1 ? agi_f_1 : d; var M12 = p === "No" ? 0 : p === "Partial" ? E36 : d > agi_f_2 ? agi_f_2 : d; var H16 = e === "s" ? (e === "s" && d > agi_f_10) : e === "h" ? (e === "h" && d > agi_f_10) : e === "ms" ? (e === "ms" && d > agi_f_3) : (e === "mj" && d > agi_f_13); var q = p === "No" ? 0 : H16 ? G10 : a < 50 ? M11 : M12; var m = a < 50 ? M36 : M37; var n = m * ((Math.pow((1 + f), (h - a)) - 1) / f); var r = q * ((Math.pow((1 + f), (h - a)) - 1) / f); var v = u * ((Math.pow((1 + f), (h - a)) - 1) / f); var o = ((n / ((1 - (1 / Math.pow((1 + i), k))) / i) - (m * (h - a) / k)) * (1 - j)) + (m * (h - a) / k); var s = (r / ((1 - (1 / Math.pow((1 + i), k))) / i)) * (1 - j); var w = v / ((1 - (1 / Math.pow((1 + i), k))) / i); m = Math.max(0, m); q = Math.max(0, q); u = Math.max(0, u); n = Math.max(0, n); r = Math.max(0, r); v = Math.max(0, v); o = Math.max(0, o); s = Math.max(0, s); w = Math.max(0, w); var n_list = [o]; var d_list = [s]; var r_list = [w]; var term_list = [0]; for (var counter = 2; counter <= Math.max(2, k); counter++) { n_list.push(counter * o); d_list.push(counter * s); r_list.push(counter * w); term_list.push(counter); } L = l; P = p; T = t; M = m; Q = q; U = u; N = n; R = r; V = v; O = o; S = s; W = w; ZZ = term_list; YY = r_list; WW = n_list; XX = d_list;';
var Validate = function () {
this.valid = true;
var _r2 = $Gid('f').value; if (_r2 10) { alert('invalid rate entered for:\nexpected pre-tax return on your investments\nbetween now and when withdrawals begin'); this.valid = false; }
var _r1 = $Gid('i').value; if (_r1 10) { alert('invalid rate entered for:\npre-tax returns you expect on your investments\nonce withdrawals begin '); $Gid('i').focus(); this.valid = false; }
return this.valid;
};
var Questions = [
new Question('Your age as of December 31 this year will be:', null, 'a', null, null, null, null, 1, {defaultvalue: 45, slidervalues:[35, 40, 45, 50, 55, 60, 65, 70, 75]}),
new Question('You are covered by an employer-sponsored retirement plan:', null, 'b', null, null, null, null, 1, {defaultvalue: 0, slidervalues:{ type: 'radio', values: [1, 0], labels: ['Yes', 'No'] }}),
new Question('You have a spouse who is covered by an employer-sponsored retirement plan:', null, 'c', null, null, null, null, 1, {defaultvalue: 1, slidervalues:{ type: 'radio', values: [1, 0], labels: ['Yes', 'No'] }}),
new Question('Your (and your spouse, if applicable) expected adjusted gross income this year:', null, 'd', null, null, null, null, 2, {defaultvalue: 120000, slidervalues:[0, 100000, 200000, 300000, 400000, 500000]}),
new Question('Your filing status this year:', null, 'e', null, null, null, null, 2, {defaultvalue: 4, slidervalues:{ type: 'radio', values: [1,2,3,4], labels: ['Single', 'Head of household', 'Married filing separately', 'Married filing jointly'] }}),
new Question('Your expected pre-tax return on your investments between now and when withdrawals begin (0% to 10%):', null, 'f', null, null, null, null, 2, {defaultvalue: 8, slidervalues:[0, 1, 2, 3, 4, 5, 6, 7, 8, 9, 10]}),
new Question('The federal income tax bracket you expect to be in during your working years:', null, 'g', null, null, null, null, 2, {defaultvalue: 22, slidervalues:{ type: 'radio', values: [10, 12, 22, 24, 32, 35, 37], labels: ['10', '12', '22', '24', '32', '35', '37']}}),
new Question('The age you expect to begin withdrawing funds from your IRA:', null, 'h', null, null, null, null, 3, {defaultvalue: 72, slidervalues:[60, 65, 70, 75, 80]}),
new Question('The pre-tax returns you expect on your investments once withdrawals begin (0% to 10%):', null, 'i', null, null, null, null, 3, {defaultvalue: 4, slidervalues:[0, 1, 2, 3, 4, 5, 6, 7, 8, 9, 10]}),
new Question('The federal income tax bracket you expect to be in at retirement:', null, 'j', null, null, null, null, 3, {defaultvalue: 22, slidervalues: { type: 'radio', values:[10, 12, 22, 24, 32, 35, 37], labels: ['10', '12', '22', '24', '32', '35', '37']}}),
new Question('The number of years you intend to withdraw funds from your IRA:', null, 'k', null, null, null, null, 3, {defaultvalue: 20, slidervalues:[0, 5, 10, 15, 20, 25, 30]})
];
var Answers = ['^L', '$M', '$N', '$O', '^P', '$Q', '$R', '$S', '^T', '$U', '$V', '$W'];
var ChartTitle = '';
var ChartLabels = ['', 'Roth IRA', 'Deductible IRA', 'nondeductible IRA'];
var ChartData = ['ZZ', 'YY', 'WW', 'XX'];
vAxisFormat = '$#,###';
hAxisTitle = 'Years';
chartLeft = 90;
initCalc();
var dd = new Date();
$Gid('this_year').innerHTML = dd.getFullYear();
//]]>
Case Studies
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