IRA Calculator

Frequently Asked Questions

What is the 2026 IRA contribution limit?

$7,000 for individuals under 50; $8,000 for those 50 and older. This limit applies to the total of all your IRA contributions (traditional + Roth combined).

Is a Traditional IRA contribution tax-deductible?

It depends on whether you have a workplace plan and your income. Single filers with a workplace plan can fully deduct up to $79,000 MAGI (2026), partially between $79,000-$89,000, and not at all above $89,000. Without a workplace plan, contributions are always fully deductible.

Can I contribute to both a Traditional IRA and a Roth IRA?

Yes, but the combined contributions to all your IRAs cannot exceed the annual limit ($7,000 or $8,000 with catch-up). You can split the limit between the two account types in any proportion.

When must I start taking RMDs from a Traditional IRA?

You must begin RMDs by April 1 of the year following the year you turn 73 (under SECURE 2.0). Unlike a Roth IRA, a Traditional IRA requires RMDs; skipping them incurs a 25% excise tax on the amount you should have distributed.

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Estimates for informational purposes only.

Important Disclaimer: Estimates for informational purposes only.

This calculator provides estimates for informational purposes only. Results are based on assumptions and may not reflect actual outcomes. Consult qualified professionals in relevant fields before making important decisions based on these results.

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How This Calculator Works

This calculator projects your Traditional IRA balance at retirement using annual contributions, an assumed return rate, your current balance, and years remaining. It applies the future-value formula for a growing annuity: FV = PV × (1 + r)ⁿ + PMT × [((1 + r)ⁿ − 1) ÷ r], where PV is the current balance, PMT is the annual contribution, r is the annual return rate, and n is years until retirement.

The tax-impact section estimates the current-year tax savings from a deductible IRA contribution (annual contribution × marginal tax rate), and projects the after-tax value of the account if withdrawn entirely in one lump sum at retirement - useful for comparing IRA options against taxable accounts.

2026 IRA Contribution Limits

For 2026, the maximum IRA contribution is $7,000 for individuals under 50 and $8,000 for those aged 50 and older (the extra $1,000 is the catch-up provision). These limits apply across all your IRAs combined - if you have both a traditional and a Roth IRA, the total contributions to both cannot exceed these amounts.

Traditional IRA contributions may be fully deductible, partially deductible, or not deductible at all, depending on whether you (or your spouse) have a workplace retirement plan and your income level. The deductibility phase-out for single filers with a workplace plan starts at $79,000 of MAGI and ends at $89,000; for married filing jointly it starts at $126,000 and ends at $146,000 (2026 figures). Even non-deductible contributions grow tax-deferred, so a non-deductible IRA can still be valuable.

Traditional vs. Roth IRA

The choice between a Traditional and Roth IRA is essentially a bet on whether you pay taxes now or later. With a Traditional IRA, you get a deduction now (if eligible), pay no taxes while the money grows, and pay ordinary income tax on every dollar you withdraw in retirement. With a Roth IRA, you get no deduction, but all qualified withdrawals - including decades of compounded growth - are completely tax-free.

General guidance: if your current tax rate is higher than your expected retirement rate, choose Traditional. If your current rate is lower than expected in retirement (common for younger workers), choose Roth. If you are unsure, split contributions between both. Note that Roth IRAs have income limits for direct contributions, while traditional deductible IRAs are limited for workplace-plan participants above certain incomes - non-deductible traditional IRA contributions are available to anyone with earned income.

IRA Investment Options and Fees

Unlike a 401(k), which is limited to the menu your employer chooses, an IRA at a brokerage gives you access to nearly any publicly traded investment: individual stocks, bonds, ETFs, mutual funds, REITs, and more. This flexibility is valuable but also increases the importance of choosing wisely.

For most savers, a simple three-fund portfolio (US total market index, international index, bond index) with low expense ratios (0.03-0.10%) outperforms the majority of actively managed funds over the long run, after fees. Higher expense ratios compound into very large differences over a 30-year horizon - a 1% annual fee versus a 0.05% fee on $500,000 over 30 years at 7% return can cost over $300,000 in lost growth.

Early Withdrawal Rules and Exceptions

Normal withdrawals: After age 59½, withdrawals are taxed as ordinary income but carry no penalty.

Early withdrawal penalty: Withdrawals before 59½ are subject to a 10% penalty plus income taxes. Several exceptions avoid the penalty: first-time home purchase (up to $10,000 lifetime), higher education expenses, disability, substantially equal periodic payments (72(t) SEPP), and others.

Required Minimum Distributions: RMDs begin at age 73 (SECURE 2.0). Failure to take an RMD results in an excise tax of 25% of the shortfall.

Tax laws change frequently. Verify current limits at IRS.gov and consult a qualified financial advisor before making retirement decisions.

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