- Current age
- This current age of the account owner. The current age of the account owner must be 72 or less for this calculator. Although it is possible to make contributions to an IRA at any age when you have eligible income, this calculator does not take Required Minimum Distributions (RMD) into account, which begin at age 75 (or 70 1/2 if you were born before 7/1/1949, 72 if you were born 7/1/1949 to 12/31/1951, 73 if you were born 1/1/1951 to 1/1/1960) and is not designed for individuals that are required to make these distributions.
- Annual contribution
- The amount you will contribute to an IRA each year. This calculator assumes that you make your contribution at the beginning of each year. **IRA_ANNUAL_MAXIMUM_TEXT**
**IRA_ROTH_PHASEOUT_TABLE**
For the purposes of this calculator, the tool assumes you are not "Married filing separately" and contributing to a Roth IRA.
Starting in 2010 high income individuals have the option to make non-deductible traditional IRA contributions and then immediately convert them to a Roth IRA. This can effectively eliminate the income phase-out for Roth IRA contributions. This option for Roth IRA contributions may or may not be available in later years depending on future changes to the IRA law. This calculator assumes that you will not be taking advantage of this option.
- Expected rate of return
- The annual rate of return for your IRA. This calculator assumes that your return is compounded annually and your contributions are made at the beginning of each year. The actual rate of return is largely dependent on the types of investments you select. The Standard & Poor's 500® (S&P 500®) for the 10 years ending December 31st 2023, had an annual compounded rate of return of 15.2%, including reinvestment of dividends. From January 1, 1970 to December 31st 2023, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.9% (source: www.spglobal.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a financial institution may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.
It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that investment funds and/or investment companies may charge.
- Age at retirement
- Age you wish to retire. This calculator assumes that the year you retire, you do not make any contributions to your IRA. For example, if you retire at age 65, your last contribution occurs when you are actually 64.
- Current tax rate
- The current marginal income tax rate you expect to pay on your taxable investments.
- Retirement tax rate
- The marginal tax rate you expect to pay on your investments at retirement.
- Adjusted gross income
- Your adjusted gross income from your tax return. This is used to determine whether or not your annual contributions might be tax-deductible.
- Married
- Check the box if you are married. This is used to determine whether or not your annual contributions are tax-deductible.
For the purposes of this calculator, the tool assumes you are not "Married filing separately".
- Employer plan
- Check the box if you have an employer-sponsored retirement plan, such as a 401(k) or pension. This is used to determine whether or not your annual contributions might be tax-deductible.
- Maximize contributions
- Check this box if you plan to contribute the maximum amount allowed to your account each year. This includes the additional catch-up contribution available when you are age 50 or over.
- Total non-deductible contributions
- The total of your traditional IRA contributions that were made without a tax deduction. Traditional IRA contributions are often tax-deductible. However, if you have an employer-sponsored retirement plan at work, such as a 401(k), your tax deduction is limited based on your income. This calculator automatically determines if your tax deduction is limited by your income. **IRA_TRAD_PHASEOUT_TABLE**
- Total contributions
- The total amount contributed to your IRA.
- IRA total after taxes
- For the Roth IRA, this is the total value of the account. For the traditional IRA, this is the sum of two parts: 1) The value of the account after you pay income taxes on all earnings and tax-deductible contributions and 2) additional earnings from the re-invested tax savings.
Please note that for distributions to include earnings that are tax-free the Roth IRA must be opened for 5 tax years. Eligible tax-free distributions include those taken for death or disability, after age 59-1/2, or for a first-time home purchase.
Please consult with a tax professional regarding IRA eligibility, tax deductions and your specific situation.
