IRA Calculator

This calculator runs three separate compound-growth formulas on the same starting balance and lays the results side by side, so you can see, in dollars rather than theory, how pre-tax, post-tax, and ordinary taxable growth diverge over time. Here is what each one is actually computing:

• Traditional IRA: FV = P x (1 + r)^n x (1 minus your future tax rate). Your money grows untouched every year, and the tax bill only arrives, applied to the whole balance, when you retire and withdraw it.
• Roth IRA: FV = P x (1 minus your current tax rate) x (1 + r)^n. You pay tax today on the portion you are contributing, and everything after that grows and comes out untouched.
• Taxable Savings: FV = P x (1 + r x (1 minus your future tax rate))^n. Here the tax bite happens every single year, on just that year's gain, which is why the exponent structure looks different from the other two.

Try It With the Calculator's Own Defaults

Load this page fresh and run the numbers exactly as pre-filled: a $100,000 balance, a 25% current tax rate, a 20% expected retirement tax rate, a 6% return, from age 40 to 65. Traditional finishes noticeably ahead of both Roth and Taxable, because it is taxed once, at the lower of the two rates (20%), on money that has had 25 years to compound, while Roth pays the higher current-rate tax (25%) on the smaller principal before any of that growth even starts. That is not a coincidence: whenever your current rate is higher than your expected future rate, Traditional's math favors you. Flip the two tax-rate assumptions and Roth pulls ahead instead.

Traditional vs. Roth, in One Sentence

Traditional defers the tax question to retirement and bets on a lower rate later; Roth settles the tax question today and bets that today's rate is the better one to lock in. If you want to dig into just that decision, pre-tax now versus post-tax later, without a taxable-account comparison alongside it, the Roth IRA Calculator focuses purely on the Roth side of that math. And if your growth is happening inside an employer plan with a match rather than a personal IRA, the 401(k) Calculator models the match and rising-salary mechanics that this tool does not touch.

Frequently Asked Questions

Q: I set my current tax rate lower than my future tax rate and the Roth number went up. Why?

Roth's tax hit is applied once, upfront, at your current rate, so a lower current rate means more of your principal escapes taxation before it starts compounding. Traditional, by contrast, taxes the whole balance at the end at your future rate, so raising the future rate hurts Traditional more than it helps Roth.

Q: Why do Taxable Savings and Roth IRA produce such similar numbers with the default inputs?

This calculator's Taxable formula only reduces your annual rate of return by the tax rate; it never taxes your principal, similar in spirit to how Roth already paid its one-time tax on principal upfront. Over long horizons the two paths can land close together, which is a reminder that the real edge of tax-advantaged accounts comes mostly from avoiding tax drag on gains, not just from sheltering principal.

Q: What if I enter the same number for current and expected tax rate?

Traditional and Taxable will still diverge, purely because of how the formulas are structured: one full-balance tax at the end versus a reduced annual rate every year. Traditional typically pulls ahead over long horizons, since deferring an equal tax rate is mathematically better than paying it in yearly installments.

Q: The Annual Income Before Tax field doesn't seem to change my results. Is that a bug?

No, that field is there for your own reference; it isn't currently used by any of the three growth formulas above, which key off your Current Balance, tax rates, return rate, and time horizon instead.