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IRA Savings Comparison Calculator: Tax Deferred Growth Vs Taxable Growth

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IRA Savings Comparison Calculator Sign
IRA Savings Comparison Calculator

This calculator will forecast the annual growth and future value of a traditional Individual Retirement Account, and then compare those tax-deferred results to an investment for which the returns are taxable in the year they are earned. Results include a year-by-year comparison chart and a button for creating a printer friendly report.

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Selected Data Record:

A Data Record is a set of calculator entries that are stored in your web browser's Local Storage. If a Data Record is currently selected in the "Data" tab, this line will list the name you gave to that data record. If no data record is selected, or you have no entries stored for this calculator, the line will display "None".

DataData recordData recordSelected data record: None
Contribute/yr:Annual contribution:Annual contribution amount:Annual contribution amount (pre-tax dollars):

Annual contribution amount (pre-tax dollars):

Enter the pre-tax dollar amount of your planned contributions to a retirement investment. Enter as a dollar amount, but without the dollar sign and any commas.

The maximum annual IRA contribution was $5,500 per spouse ($6,500 if age 50 or older) the last time this calculator was updated, therefore the maximum entry in this field is $13,000.

Age now:Current age:Your current age:Your current age:

Your current age:

Enter your current age in years. Enter as an integer (no decimal points or fractions).

Retire age:Age to retire:Age you plan to retire at:Age you plan to retire at:

Age you plan to retire at:

Enter the age you plan to retire at. Enter as an integer (no decimal points or fractions).

Return rate:Rate of return:Annual return on investments:Annual return on investments:

Annual return on investments:

Enter the before-tax annual percentage rate you expect to earn on your investments between now and when you retire. Enter as a percentage, but without the percent sign (for .06 or 6%, enter 6).

Tax rate:Current tax rate:Current marginal tax rate:Current marginal tax rate:

Current marginal tax rate:

Enter your current marginal tax rate. Enter as a percentage, but without the percent sign (for .15 or 15%, enter 15).

ResultsIRANon-IRANon-IRANon-IRA
Investment
Non-IRA
Investment
BalanceBalance at retireBalance at retirementBalance at retirement:

Balance at retirement:

The left-hand column is the estimated future value of your IRA, which has grown at the full expected return on investment (tax-deferred).

The right-hand column is the estimated future value of a non-IRA investment, which has grown by the after-tax return on investment (ROI x (1 - tax rate)).

Taxes dueTaxes due if drawnTaxes due if withdrawnTaxes due if withdrawn at retirement:

Taxes due if withdrawn at retirement:

The left-hand column is the amount of taxes that would be due on your IRA if you withdrew the funds at retirement, since tax on both contributions and earnings are deferred until the funds are withdrawn.

The right-hand column is zero, since you would have already paid taxes on the contributions and earnings.

After-tax drawAfter-tax withdrawalAfter-tax withdrawalAfter-tax withdrawal at retirement:

After-tax withdrawal at retirement:

The left-hand column is the estimated after-tax value of your IRA.

The right-hand column is the estimated after-tax value of a non-IRA investment.

IRA savingsIRA savingsSavings from IRA tax deferralSavings from IRA deferral of taxes:

Savings from IRA deferral of taxes:

The left-hand column represents the additional earnings you would realize by contributing to a tax-deferred IRA instead of contributing to a non-tax-deferred investment.

If you would like to save the current entries to the secure database, tap or click on the Data tab, select "New Data Record", give the data record a name, then tap or click the Save button. To save changes to previously saved entries, simply tap the Save button. Please select and "Clear" any data records you no longer need.

Feedback AppreciatedFeedback Greatly AppreciatedYour Feedback Would Be Greatly AppreciatedYour Feedback Is Greatly Appreciated
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About

About the IRA Savings Comparison Calculator

This calculator will forecast the growth of a Traditional IRA, and then compare the tax-deferred results to the growth of a non-qualifying investment.

When planning for your retirement it's important to understand the difference between a tax-deferred investment and non tax-deferred investment.

In the case of an Individual Retirement Account (IRA), not only are your contributions deductible from your taxable income in the year they are made, but the earnings also grow on a tax-deferred basis.

In the case of a non tax-deferred investment, the contributions you make will be with after-tax dollars, and the earnings will be added to your annual taxable income. This means that you are giving up the opportunity to earn interest on the funds that will be used to pay the taxes.

As this calculator will attempt to point out, the foregone interest on non-deferred taxes can be substantial over the long run.

Please keep in mind that the results of this calculator are merely estimates. Be sure to consult a qualified tax professional before making any investment decisions.

Also keep in mind that you might be better off to first pay off any high interest debt you have, and then use the freed-up payment amounts to contribute to your retirement investment.

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Instructions

How to use the IRA Savings Comparison Calculator

Step #1:

Enter the amount of your annual contribution to an IRA.

Step #2:

Enter your current age.

Step #3:

Enter the age you plan to retire at.

Step #4:

Enter the annual rate of return you expect to earn on your retirement savings.

Step #5:

Enter your current tax bracket percentage. A look-up table is included in the pop-up help (tap the info icon).

Step #6:

Tap the "Calculate IRA Savings" button and scroll down to view the results, which will include a year-by-year growth comparison chart, and a button for creating a printer friendly report.

Saving Entries:

If your web browser supports Local Storage, you can save your entries to your web browser so won't have to start over on your next visit. Please note that your saved entries can only be retrieved from the same device and web browser you were using when you stored them. If you would like to access your saved entries from any device I invite you to subscribe to the Ad-Free Member Version.

To save your entries to your web browser, click or tap the Data tab in the Help and Tools section (mobile: top right of the main screen), select "New Data Record" from the drop-down menu, enter a name for the data record, and then tap or click the Save button.

To load previously saved entries, click or tap the Data tab and select the saved data record from the drop-down menu. You can then save any changes to your entries by simply clicking the Save button while the data record is selected.

To clear a named set of saved entries, click or tap the Data tab, select the saved data record from the drop-down menu, and then tap or click the Clear button.

Numbers and Decimals:

Only numeric characters (0-9 and decimal points) may be entered in numeric fields. Non-numeric characters (dollar signs, percent signs, commas, etc.) may cause calculation errors. If the field includes a grid icon, tapping the icon will open a popup keypad which will include only the characters allowed in the field. If your device keypad does not include a decimal point, use this popup keypad to enter decimal numbers where applicable.

Popup Tool Tips:

Tap the info (i) icons for a further explanation of each entry field (you can click [X] or outside of the pop-up tool tips to close them). A summary of these explanations, along with any additional term explanations, can also be found under the Terms tab.

Disclaimer:

Since I can't test for every possible combination of numbers, please be sure to double-check the results of this calculator yourself before considering them to be valid. If you do discover an issue with the calculated results, please report the issue using the feedback form located below the calculator.

Scrolling & Shrinking:

In order to scroll the calculator vertically you will need to swipe just outside of the calculator's dark-blue border, or use the window's far right-hand scroll bar, whichever is applicable to your device.

If the top section of the calculator becomes to tall for your viewport, tapping in the "Enter a problem..." field should reset the top section to its original height.

Disclaimer:

The Algebra Calculator is the only calculator on the site that I did not create myself. And since I did not create it, I don't have access to the code for fixing any issues you may be experiencing. So if you are having issues with the calculator, please visit the support page at Mathway.com for assistance.

Glossary

Fields, Terms, and Definitions.

Reset button:

Clicking the "Reset" button will restore the calculator to its default settings.

Pocket Calculator

Calculate any amounts needed to enter into calculator.

 

Data Management

Save and retrieve entries and notes (requires HTML5 compliant web browser).

Calculator Data

Calculator Data:

If you are using the latest version of your web browser software, this feature will allow you to save your calculator entries to your web browser's local storage in between visits. This means the calculator entries can only be recalled with the same device and web browser you were using when you saved them. If you'd like to save data between devices you will need to subscribe to the Ad-Free Member Version.

Save: To save a new set of calculator entries, select "New Data Record" from the dropdown list, enter a nickname for the data record, then click the "Save" button.

Load: To load a previously saved set of calculator entries, simply select the name of the data record from the dropdown list.

Save Changes: To save changes to a set of previously saved calculator entries, be sure the name of the data record is selected, and then click the "Save" button.

Clear: To clear a saved set of entries, be sure the name of the data record is selected, and then click the "Clear" button.

Backup Data
My Notes:
Subscribe to the Cloud level of the Ad-Free Member Version to save your entries and notes to a secure online database, allowing you to access your saved entries from any device or web browser.

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Help and Tools

Help and Tools:

This section, which you can Unstick or Hide in the Calculator Preferences (just above the top of the calculator), contains the following tabs (content too long to fit within bordered frame can be scrolled up and down):

About: Click this tab for an introduction to the calculator.

Instructions: Click this tab for step-by-step instructions for using the calculator.

Terms: Click this tab for a list of the descriptions that are located within each popup help button (info icons).

PCalc: Click this tab for a handy "pocket" calculator you can use when you need to calculate an entry needed for the calculator.

Data: Click this tab to save a set of entries or a note in between visits. Entries and notes will be stored to your web browser's local storage (if supported by your browser of choice), meaning they can only be recalled with the same device and web browser you were using when you saved them. If you'd like to save entries and notes between devices you can do so by subscribing to the Ad-Free Member Version.

 

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