One of the most powerful retirement questions is also one of the most practical: how much should I put into an IRA every year, and which flavor of IRA should it be? Stacking annual contributions onto a growing balance for thirty years produces numbers that look almost fictional, yet they come from a single compounding formula. The IRA Calculator below projects your balance at retirement, then converts the Traditional IRA, the Roth IRA and a regular taxable account into after-tax values so you can compare all three honestly on the same scale.
How Much Should I Contribute to an IRA?
In an ideal world, everyone would fill the annual limit. For 2026 that is $7,500, rising to $8,600 at age 50 or older with the catch-up contribution, and every year you max out is a full year of tax-advantaged growth you will never get back. Real budgets demand a more graduated answer. Contribute whatever you can carve out consistently, treat the contribution as a recurring bill, and increase it with every raise. The calculator makes the case visible: raise the annual contribution slider and watch both the terminal balance and the milestones shift by meaningful amounts.
How the Projection Works
The engine behind every result is the future value formula for a stream of annual contributions. Your current balance compounds for the number of years until retirement, and each annual contribution compounds for the years remaining after it is made. The formula assumes contributions arrive at the end of each year, which is the standard ordinary annuity convention. The result is extremely sensitive to the return you assume, so the calculator's return slider deserves your honest attention before you read anything else.
FV = P × (1 + r)^n + C × [((1 + r)^n − 1) / r]
Under the defaults, a 30-year-old with a 30,000 balance contributing 7,000 a year at a 7 percent return reaches roughly one million dollars at 65. The projection widget shows the corpus climbing year by year, while the milestones highlight the crossing points at 100,000, 250,000, 500,000 and one million, so you can see how early patience does the heavy lifting.
Traditional vs Roth: The Core Trade-off
The traditional IRA and the Roth IRA are mirror images of each other. A traditional IRA takes pre-tax money today, gives you a deduction on this year's tax return, and then taxes your withdrawals in retirement. A Roth IRA takes after-tax money, offers no current deduction, and lets every cent of growth come out tax-free. Which one you choose should hinge on one comparison: your marginal tax rate today against the rate you expect to pay in retirement.
If your retirement rate will be lower, the traditional account wins because you defer taxation to a cheaper year. If your retirement rate will be higher, the Roth wins because you lock in today's lower rate. The calculator models this directly: the traditional after-tax figure applies the retirement rate to the entire pre-tax balance, while the Roth figure shrinks the contribution by today's rate and leaves the growth untouched. Most planners see a combination of both as the sensible hedge, since nobody knows their future bracket with certainty.
Taxable Savings as the Baseline
To see why these accounts exist, it helps to price the alternative. A regular taxable brokerage account receives after-tax contributions exactly like a Roth, but the growth is taxed: dividends each year and capital gains when you sell. This calculator applies the retirement tax rate to the accumulated gains, producing an after-tax figure that trails both IRAs in almost every scenario. The gap between the taxable and Roth balances is the pure price of paying tax along the way instead of avoiding it inside a retirement wrapper. That gap is the government's entire reason for offering the contribution limits.
Why After-Tax Comparison Matters
Comparing pre-tax traditional money against after-tax Roth money is comparing apples to oranges. One still owes its taxes; the other has paid them. The calculator normalizes both to after-tax dollars at retirement so the comparison is fair. A smaller-looking traditional pre-tax balance can beat a bigger-looking Roth number once you subtract the retirement tax, and the opposite can happen at higher future rates. Always read the traditional figures through the after-tax lens, because that is the money you will actually live on.
Inflation and Real Returns
A million dollars in 2056 will not buy what a million buys today, and any retirement plan that ignores that is planning in fantasy currency. The inflation banner uses your expected inflation rate to convert the projected balance into today's purchasing power, and the real return it reports strips inflation from the growth rate. With a 7 percent nominal return and 3 percent inflation, the real growth is only about 3.9 percent, roughly half of what the headline number suggests. Building your income target in today's dollars is what keeps the plan honest.
SEP, SIMPLE and Self-Employed Accounts
Workers who are self-employed have heavier tools. A SEP IRA allows employers, which includes the self-employed, to contribute up to 25 percent of compensation with a much higher dollar ceiling than a personal IRA, making it the default for solo businesses. A SIMPLE IRA is designed for small companies with up to 100 employees, combining employee deferrals with a required employer match and famously low administrative costs. Both behave like traditional accounts for tax purposes, so the traditional projection in this calculator approximates their growth once you enter the larger contribution level.
The Power of Time and Consistency
The most striking feature of any retirement projection is how little early growth shows up as a monthly number and how much it eventually accumulates. In the first years, contributions dwarf the earnings, and the milestones come slowly. Decades later, the earnings dwarf the contributions, and the balance climbs a larger amount each year than you may have contributed in any single year. This is the compounding curve, and it is why starting a few years earlier is worth more than contributing a few thousand extra later. Every year an IRA sits funded, it compounds on top of everything before it.
Consistency matters as much as the calendar. Funding the account automatically every month smooths out market timing and removes the temptation to skip a year when other expenses appear. Many people set an automatic transfer on payday so the contribution is never visible as spendable cash. The projection and milestone widgets make this concrete: drag the contribution slider and watch the milestone calendar shift, because each extra dollar early matters more than the same dollar added near retirement.
Roth Conversions in One Paragraph
A Roth conversion moves money from a traditional IRA into a Roth IRA, paying income tax on the converted amount now in exchange for all future growth flowing out tax-free. It is attractive in years with low income, when a saver can convert money at a low marginal rate and lock in that bargain forever, and it is often executed in small chunks over several years to stay inside a favorable bracket. This calculator models annual contributions rather than conversions, so treat a conversion as a one-time lump addition to the Roth balance and adjust the starting balance accordingly.
IRA vs 401(k): Where to Save First
The decision is not really one versus the other. In most years you can fund both, and the usual order is: contribute to your 401k up to the employer match, because a match is free money on a guaranteed return; then fund your IRA, where investment choices are nearly unlimited; then, if anything remains, return to the 401k, which allows far more than an IRA each year. A 401k typically offers fewer, pricier fund options while an IRA gives you the whole market. The timeline math in this calculator applies equally to either account type.
Common Mistakes
- Comparing a pre-tax traditional balance directly with an after-tax Roth balance.
- Ignoring the employer match, which is the highest-yielding step in the whole plan.
- Assuming the current tax rate applies in retirement, when most people's drops.
- Planning in nominal dollars without adjusting for inflation's erosion.
- Withdrawing early and accepting the 10 percent penalty plus taxes.
- Forgetting the contribution limit and accidentally over-contributing mid-year.
Key Assumptions
- Contributions are made annually at the end of each year and compound at a constant return.
- The return and inflation rates remain fixed for the entire period.
- Traditional balance is taxed entirely at the retirement rate; Roth growth is tax-free.
- Taxable gains are taxed at the retirement rate on top of after-tax contributions.
- Phase-outs, fees, market volatility and required minimum distributions are excluded.
An IRA is one of the few places where a modest, consistent habit matures into a seven-figure cushion simply by showing up every year. Enter your balance, your contribution and your best guesses for return and taxes, and the calculator will show you where that habit leads, in after-tax dollars and today's purchasing power.
Disclaimer
Results are provided as estimates for informational purposes only and may be inaccurate. Always verify outcomes with a qualified professional before making financial or personal decisions based on these calculations.