IRA Calculator
Project a traditional IRA to retirement using the 2026 contribution limit, then see the after-tax value at your expected retirement tax rate — and how it stacks up against putting the same money in a plain taxable account instead.
Traditional IRA (after-tax) vs. taxable account
2026 contribution limit
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A traditional IRA contribution is made with pretax dollars and grows tax-deferred, so every dollar you would have paid in tax today instead stays invested and compounding. The trade-off arrives at withdrawal, when the entire balance — contributions and all the growth — is taxed as ordinary income at your rate in retirement. Because most people land in a lower tax bracket after they stop working, that swap is usually favorable: you effectively defer tax from your highest-earning years to your lowest. A regular taxable account gets no such deferral — its growth is taxed as it’s realized, which quietly shrinks the base that compounds every single year.
How it’s calculated
Each year until retirement, the annual contribution is added to the traditional IRA balance and the whole balance grows by the expected return, fully tax-deferred. At retirement, the pretax balance is taxed once at your retirement marginal rate to get the after-tax value. For the taxable-account comparison, the same contribution is first reduced by your current tax rate (since taxable savings come from already-taxed income), and each year’s investment growth is taxed at your current marginal rate as it accrues — the standard simplifying assumption for taxable-account comparisons. Deduction phase-outs for high earners covered by a workplace plan are not modeled; this calculator assumes a fully deductible contribution.
Results update as you type and are estimates for education, not tax or investment advice — consult a tax professional about your specific deduction eligibility.
Annual schedule
Traditional IRA balance (pretax) versus the after-tax taxable-account equivalent, year by year.
Worked example
Starting from a $10,000 balance with $7,500 contributed every year at a 7% return, from age 30 to 65 (35 years): the traditional IRA grows to $1,216,116.76 pretax. Taxed once at an 18% retirement rate, that’s worth $997,215.75 after tax. The same contribution pattern in a taxable account — contributions reduced by a 24% current tax rate, growth taxed annually at 24% — reaches only $640,911.22, a $356,304.53 gap in the IRA’s favor.
Common mistakes
- Assuming the full IRA balance is spendable — a traditional IRA still owes ordinary income tax on every dollar withdrawn, including all the growth.
- Contributing more than the annual IRS limit, which triggers a 6% excise tax on the excess each year it stays in the account.
- Ignoring the deduction phase-out that applies if you’re covered by a workplace retirement plan and your income is above the IRS threshold.
Where it is used
- Deciding how much to contribute to a traditional IRA before the annual deadline.
- Comparing a traditional IRA against simply investing in a regular brokerage account.
- Estimating the after-tax retirement income a current IRA balance and contribution pace will produce.
Frequently asked questions
What is the 2026 IRA contribution limit?
$7,500 for anyone under 50, and $8,600 for those 50 and older, per IRS Notice 2025-67. This limit applies across all your traditional and Roth IRAs combined, not per account.
Can I always deduct my traditional IRA contribution?
Not always. If you (or your spouse) are covered by a workplace retirement plan, the deduction phases out above certain modified adjusted gross income thresholds set annually by the IRS. If neither spouse is covered by a workplace plan, the full contribution is generally deductible regardless of income. This calculator assumes a fully deductible contribution — check the current phase-out ranges on IRS.gov if a workplace plan applies to you.
Why does a traditional IRA sometimes beat a taxable account by so much?
Two reasons compound together: the traditional IRA invests your full pretax contribution (so more principal goes to work from day one), and it grows completely tax-deferred, while a taxable account's gains are chipped away by tax every year they're realized. The gap widens the longer the money stays invested.
Is a traditional IRA or Roth IRA better for me?
It largely comes down to whether your tax rate now is higher or lower than you expect it to be in retirement. A traditional IRA is generally better if your rate will be lower in retirement (you deduct now, at a high rate, and pay tax later at a low one); a Roth flips that. Use our Roth IRA Calculator to run the same numbers as a Roth.
What happens if I withdraw from a traditional IRA early?
Withdrawals before age 59½ are generally hit with a 10% early-withdrawal penalty on top of ordinary income tax, except for a handful of IRS-qualified exceptions (first home, certain medical or education expenses, and others). This calculator assumes withdrawals happen at or after your stated retirement age.