An Individual Retirement Arrangement (IRA) is a US tax-advantaged retirement account available to anyone with earned income. Project the balance, factoring in contributions, return rate, and the 2026 contribution limits.
Quick answer. An Individual Retirement Arrangement (IRA) is a US tax-advantaged retirement account available to anyone with earned income. Project the balance, factoring in contributions, return rate, and the 2026 contribution limits.
Interactive calculator
IRA calculator
Project growth of a Traditional or Roth IRA.
Projected balance-
Total contributed-
Growth-
Lifetime tax savings (estimated)-
How is this calculated?
FV = balance * (1+r)^t + PMT * ((1+r)^t - 1) / r
Tax savings approximates the value of either (a) up-front deductions (Traditional / RRSP / FHSA) or (b) tax-free growth (Roth / TFSA / ISA) relative to a taxable account.
Use the working calculator
US IRA Calculator
Working calculator with side-by-side Traditional vs Roth projections.
An Individual Retirement Arrangement (IRA) is a US tax-advantaged retirement account available to anyone with earned income, regardless of whether they also participate in a workplace 401(k). The IRA calculator projects the future balance of a Traditional or Roth IRA from your current balance, annual contributions, expected return, and years to retirement, and shows the after-tax value of each option side by side so you can compare them on a like-for-like basis.
The two main IRA types differ in WHEN you pay tax. Traditional IRA contributions are tax-deductible at the time of contribution (if you qualify), growth is tax-deferred, and all withdrawals are taxed as ordinary income in retirement. Roth IRA contributions are made with after-tax dollars (no deduction), growth is tax-free, and qualified withdrawals are entirely tax-free. The 2026 contribution limit is $7,000 per year, $8,000 if age 50 or older, with the limit shared across both account types.
How it works
FV balance (both) = Balance x (1+r)^n + PMT x ((1+r)^n - 1) / r
Traditional after-tax = FV x (1 - retirement marginal rate)
Roth after-tax = FV (fully tax-free if qualified)
Crossover rule = Roth wins if retirement rate >= contribution rate
Backdoor Roth = Non-deductible Trad contribution + immediate conversion
PMT = annual contribution, max $7,000 (under 50) or $8,000 (50+) in 2026, combined across Traditional + Roth.
r = expected annual return; 7 percent nominal or 5 percent real is a reasonable long-run assumption for diversified equity.
n = years until withdrawal, NOT just until retirement (Roth can be left to grow indefinitely without RMDs).
Contribution marginal rate = current top federal + state bracket; determines Traditional's up-front saving.
Retirement marginal rate = projected effective + marginal rate at withdrawal; the harder number to forecast.
Worked example
Consider a 35-year-old single filer in 2026 with $5,000 current IRA balance contributing $7,000 per year (the 2026 cap) for 30 years until age 65 at a 7 percent nominal return:
Total contributions over 30 years: $5,000 + $7,000 x 30 = $215,000.
Projected final balance: $5,000 x (1.07)^30 + $7,000 x ((1.07)^30 - 1) / 0.07 = $38,061 + $661,150 = approximately $699,000.
Growth: $699,000 - $215,000 = $484,000 in tax-advantaged growth.
Roth scenario (current 22% bracket): contributions cost $7,000 after-tax per year; withdrawals at 65+ are fully tax-free. After-tax balance = $699,000.
Traditional scenario (current 22% bracket): deductions save $1,540 per year x 30 = $46,200 in current tax; if retirement marginal rate is 22 percent, after-tax balance = $699,000 x 0.78 = $545,000.
Tradeoff: Roth ends with $699,000 tax-free; Traditional gives $545,000 plus the $46,200 in tax savings that compounded in a side taxable account.
Side taxable on Traditional savings (at 5% real after-tax): approximately $145,000, so Traditional total = $545,000 + $145,000 = $690,000.
Result: When current and retirement marginal rates are equal (22 percent), Traditional and Roth produce nearly identical wealth ($699K vs $690K). Roth wins if the retirement bracket is HIGHER than today; Traditional wins if LOWER. Most planners hedge with both for tax diversification.
2026 IRA contribution and phase-out limits
Item
Single
Married Filing Jointly
Notes
Annual contribution (under 50)
$7,000
$7,000 each
Combined Trad + Roth
Catch-up (age 50+)
+$1,000
+$1,000 each
Total $8,000
Roth IRA phase-out
$150,000 to $165,000 MAGI
$236,000 to $246,000 MAGI
No Roth above top
Traditional deduction phase-out (with workplace plan)
$79,000 to $89,000 MAGI
$126,000 to $146,000 MAGI
Active participant rules
Traditional deduction phase-out (spouse covered)
n/a
$236,000 to $246,000 MAGI
Non-covered spouse
Required Minimum Distribution age
73
73 each
Traditional only, not Roth
Saver's Credit phase-out
$24,250 max AGI
$48,500 max AGI
Bonus 10 to 50% match
Common mistakes
Hitting the Roth income limit and skipping the backdoor. High earners over $165,000 single MAGI cannot contribute directly to Roth but can contribute non-deductible Traditional then convert immediately. The strategy is fully legal and explicitly permitted by IRS guidance.
Forgetting the pro-rata rule on conversions. If you have any pre-tax Traditional IRA balance (rollover from old 401(k), prior deductible contributions), the backdoor Roth conversion is taxed proportionally, not just on the new contribution.
Missing the contribution deadline. IRA contributions can be made through tax-filing day (April 15, 2027 for 2026 tax year), not just December 31. Many savers miss the bonus 3.5-month window.
Confusing the 5-year clock. Roth conversions have their own 5-year clock per conversion; withdrawing converted principal before 5 years AND before age 59.5 triggers a 10 percent penalty. Roth contributions themselves can always be withdrawn tax and penalty free.
Ignoring RMDs on Traditional IRAs. Required Minimum Distributions kick in at age 73 (rising to 75 in 2033), force taxable withdrawals whether you need them or not, and accelerate the tax torpedo on Social Security.
Putting bonds in the Roth and stocks in Traditional. Asset location theory says higher-expected-return assets (stocks) belong in Roth (tax-free growth is more valuable) and bonds in Traditional. Many DIY investors do the reverse.
7,000 USD per year if under 50, 8,000 USD if 50 or older (the 1,000 USD catch-up contribution starts the calendar year you turn 50). This limit is COMBINED across all your Traditional and Roth IRAs - the IRS treats them as a single contribution pool. The cap does not include rollovers from a 401(k) or 403(b), conversions from Traditional to Roth, or employer SEP-IRA contributions, which have their own separate limits.
Can I contribute to both Traditional and Roth IRA?+
Yes, but the combined total cannot exceed the annual limit. You could put 4,000 USD in Traditional and 3,000 USD in Roth, but not 7,000 USD in each. Strategically, many savers split contributions based on uncertainty about future tax brackets: Traditional locks in today's deduction at current marginal rate, Roth pays tax now to lock in tax-free withdrawals. A 50/50 split provides tax diversification in retirement when both account types are available for flexible withdrawals.
Is there an income limit for IRA contributions?+
Roth IRA: phase-out 150,000 to 165,000 USD single / 236,000 to 246,000 USD MFJ in 2026 (no contributions allowed above the top of the range). Traditional IRA: there is no income limit for CONTRIBUTING, but deductibility phases out from 79,000 to 89,000 USD single / 126,000 to 146,000 USD MFJ if you also have a workplace retirement plan. Non-deductible Traditional IRA contributions are always allowed at any income, and combined with the backdoor Roth strategy can effectively bypass the Roth income limit.
What is the backdoor Roth IRA?+
A two-step process for high earners over the Roth income limit: (1) make a non-deductible contribution to a Traditional IRA (no income limit), (2) immediately convert that Traditional IRA balance to a Roth IRA. The conversion is taxable on any earnings between contribution and conversion, but since the conversion happens within days the taxable amount is usually pennies. The strategy works cleanly only if you have NO pre-tax Traditional IRA balance (otherwise the pro-rata rule applies). Backdoor Roth is explicitly permitted by IRS guidance.
Sources
IRS (2026) Revenue Procedure 2025-32 - 2026 IRA contribution and phase-out limits.
IRS Publication 590-A (2025) Contributions to Individual Retirement Arrangements (IRAs).
IRS Publication 590-B (2025) Distributions from IRAs.
SECURE Act 2.0 (2022) - RMD age changes, catch-up Roth requirement for high earners.
