IRA Calculator

Traditional, SIMPLE, and SEP IRA: pre-tax now, taxed later

A Traditional IRA is funded with pre-tax dollars, money you deduct from your taxable income for the year you contribute, which lowers your tax bill right now. SIMPLE and SEP IRAs, the two employer/self-employed cousins of a Traditional IRA, work the same way at withdrawal: every dollar you take out in retirement, contributions and every dollar they earned along the way, is taxed as ordinary income at whatever your rate is then. This calculator groups all three under one “Traditional/SIMPLE/SEP” column since they share that identical pre-tax-in, taxed-at-withdrawal mechanic; what mainly separates them in real life is who can use each one and how much they can contribute, covered below. All three still benefit from tax-deferred growth along the way, since none of them tax dividends, interest, or gains year to year the way an ordinary brokerage account does; only the eventual withdrawal is taxed.

Roth IRA: taxed now, tax-free later

A Roth IRA flips the order: you contribute money you have already paid tax on, so there is no deduction today, but qualified withdrawals in retirement, contributions and earnings alike, are a completely tax-free withdrawal. Because this calculator starts every account from the same nominal before-tax contribution, the Roth column only receives that contribution after today's marginal tax rate has already been taken out of it, reflecting that Roth dollars are genuinely more expensive to contribute today in exchange for never being taxed again.

Regular taxable savings: the baseline comparison

The third column is what happens to that same after-tax amount if it is simply invested in an ordinary brokerage account instead of any IRA. Its growth is taxed every year in this projection, a simplified stand-in for the dividends, interest, and realized gains a taxable account normally owes tax on annually, rather than being allowed to compound untouched. Comparing this column against Roth isolates the tax treatment of growth alone, since both start from the identical after-tax contribution.

Worked example: the same effort, three different outcomes

Contribute $5,000 a year for 10 years with no investment growth at all, so every balance is a clean, growth-free number that isolates the tax effect. At a 22% current marginal rate and a 22% assumed rate at withdrawal too: the Traditional/SIMPLE/SEP column invests the full $5,000 a year, ending at $50,000 before tax and $39,000 after the 22% withdrawal tax. Roth and taxable savings each only receive $5,000 × (1 - 0.22) = $3,900 a year, ending at $39,000 with no growth to tax either way, so all three land at the same after-tax balance in this particular zero-growth case. Turn on a real rate of return in the calculator above and the gap opens up: Roth keeps every dollar of growth, taxable savings loses a slice of its growth every year, and Traditional/SIMPLE/SEP's larger pre-tax balance still owes its one tax bill at the end.

A smaller, longer-horizon example makes the same point with a more realistic contribution size. Put $100 a month in a Roth IRA for 30 years (age 35 to 65, no starting balance) at a 7% assumed annual return, and this calculator's own monthly contribute-then-grow method takes that $1,200-a-year Roth contribution to a projected balance of about $122,708.75, entirely tax-free at withdrawal, versus $36,000 actually contributed over those 30 years, growth alone accounts for roughly 71% of the final balance.

Traditional vs. Roth IRA: the retirement tax rate test

The choice mostly comes down to your tax rate in retirement against your rate today. The table below follows a saver who adds the 2026 maximum of $7,500 a year from age 30 to 65, earns 7% a year, sits in the 22% bracket now, and starts with nothing saved. Roth and taxable savings each receive $7,500 × (1 - 0.22) = $5,850 a year.

At a 22% retirement rate the Traditional/SIMPLE/SEP and Roth columns tie to the dollar, because a pre-tax dollar taxed once at 22% leaves exactly what an already-taxed dollar does. A lower retirement rate favors Traditional/SIMPLE/SEP and a higher one favors Roth. An existing balance tilts the result toward Roth, since this tool taxes that balance at withdrawal only in the Traditional column.

SEP and SIMPLE IRA: higher limits for the self-employed and small business owners

A SEP IRA lets a self-employed person or a small business contribute a percentage of self-employment income, up to a limit far above a Traditional IRA's, entirely as an employer-side contribution with no separate employee deferral. A SIMPLE IRA is aimed at small businesses that want to let employees contribute their own salary deferrals, with a required employer match or contribution, at a limit that sits between a Traditional IRA's and a SEP's. Because both real-world limits are tied to income and business structure and change periodically, this calculator applies the general Traditional/Roth limit to the before-tax contribution field for simplicity; treat the projection as directionally correct and check the current-year SEP or SIMPLE limit for your own situation before relying on it for contribution planning, rather than running a dedicated sep contribution calculator or sep ira contribution calculator against your actual self-employment income.

IRA rollovers

A rollover moves an existing retirement balance, commonly from a former employer's 401(k), into an IRA without triggering the tax and penalty a straight withdrawal would. A direct (trustee-to-trustee) rollover sends the money straight from one custodian to the next and is the safer route. An indirect rollover pays the balance to you first, withholds 20% for tax automatically, and gives you only 60 days to deposit the FULL original balance, including the withheld 20% out of your own pocket, into a new account or the shortfall is treated as a taxable withdrawal. To model a rollover here, simply enter the rolled-over amount as your current balance and project forward.

IRA vs. 401(k): how the two compare

A 401(k) and a Traditional/Roth IRA share the same two basic tax treatments, pre-tax or after-tax, but a 401(k) is employer-sponsored, often comes with a matching contribution, and carries a much higher annual contribution limit than an IRA. Many savers use both: a 401(k) up to at least the full employer match, since that match is close to free money, and an IRA on top for additional tax-advantaged room or a different investment lineup than the employer's plan offers. This site's own 401(k) calculator projects an employer-sponsored account the same way this page projects an IRA.

Self-directed IRA

A self-directed IRA is still a Traditional, Roth, SEP, or SIMPLE IRA in every tax respect; “self-directed” describes the custodian, not a different tax category, and simply means the account can hold assets a mainstream brokerage IRA typically cannot, such as real estate, private company shares, or precious metals, rather than being limited to stocks, bonds, and funds. The growth projection and tax treatment this calculator models apply the same way to a self-directed account; only the underlying investments, and the extra due diligence they require, are different.

How this IRA calculator runs the three-way comparison

All three columns start from the same nominal before-tax contribution and the same expected return, so the only thing that ever changes between them is tax treatment, never the underlying investment performance. Traditional/SIMPLE/SEP invests the full contribution and grows it at the entered return, then applies your retirement tax rate once, at the end. Roth first shrinks the contribution by today's marginal tax rate, since that money was already taxed before it went in, then grows the smaller amount at the same entered return, completely tax-free thereafter. Regular taxable savings starts from that identical shrunken, already-taxed contribution, but its growth rate is itself reduced by today's marginal tax rate every year, modelling an ordinary account being taxed annually on its gains. Isolating tax treatment this way, rather than letting growth assumptions drift between columns, is what makes the three final numbers genuinely comparable rather than three unrelated projections.

The same steps in formula form, where FV is the balance at retirement when c dollars a year go in at an annual return of r:

Reading the balance accumulation graph and the annual schedule

The three-line graph plots all three balances from today through retirement on one axis, which makes it easy to see the final gap and also when it actually opens up: with no growth at all the three lines can start identically and only diverge once a real rate of return is entered, since it is compounding, not the raw contribution gap, that widens the distance between them year after year. The annual schedule below it lists a Start and an End balance for each account, every year, letting you check precisely how much any single year added to each column rather than only comparing the totals at the far right of the graph.

2026 IRA contribution limits, and a scope note

The IRS caps how much you can contribute to a Traditional and a Roth IRA combined each year, not to each separately; splitting a contribution between both does not raise the total allowed. For 2026, that published limit is $7,500 under age 50, and $8,600 (a $1,100 catch-up contribution on top) at 50 and older, applied automatically here based on the current age you enter. This tool covers US retirement accounts only, assumes a constant annual rate of return and constant tax rates for the entire period, and is a planning aid, not personalized tax advice; a qualified tax professional can factor in income phase-outs, deductibility rules, and your specific filing situation in a way a general calculator cannot.