Calculate and compare Traditional IRAs, SEP IRAs, SIMPLE IRAs, Roth IRAs, and regular taxable savings. Estimate growth, tax savings, and balance at retirement.
Our traditional IRA vs Roth calculator compares tax-advantaged retirement accounts with 2025 contribution limits and early withdrawal penalty calculations. This IRA tax benefits calculator helps you choose between Traditional and Roth IRAs based on current tax rates, retirement tax projections, and time horizon.
The retirement savings calculator IRA features include contribution limit tracking for 2025, early withdrawal penalty calculations, and side-by-side comparisons of after-tax retirement values. Whether you need an IRA contribution limits calculator or want to model early withdrawal scenarios, this comprehensive tool provides accurate projections.
Pay taxes on withdrawals in retirement
No taxes on qualified withdrawals
For self-employed and small business owners
For small businesses with 100 or fewer employees
| IRA Type | Under Age 50 | Age 50+ | Income Limits (2025) |
|---|---|---|---|
| Traditional IRA | $7,000 | $8,000 | Phase-out begins at $77K-$87K (single) |
| Roth IRA | $7,000 | $8,000 | Phase-out: $138K-$153K (single) |
| SEP IRA | 25% of compensation | 25% of compensation | Up to $70,000 |
| SIMPLE IRA | $16,000 | $19,500 | No income limits |
| Feature | Traditional IRA | Roth IRA |
|---|---|---|
| Contributions | Tax-deductible | After-tax |
| Growth | Tax-deferred | Tax-free |
| Withdrawals | Taxed as ordinary income | Tax-free (qualified) |
| Required Distributions | Starting at age 73 | None for original owner |
| Early Withdrawal Penalty | 10% before age 59½ | 10% on earnings before 59½ |
| Tax Bracket | $7,000 Traditional IRA Tax Savings | Future Value at 6% (30 years) | Roth IRA After-Tax Value |
|---|---|---|---|
| 12% | $840 | $40,212 | $40,212 |
| 22% | $1,540 | $40,212 | $40,212 |
| 24% | $1,680 | $40,212 | $40,212 |
| 32% | $2,240 | $40,212 | $40,212 |
Traditional IRAs: Must begin taking RMDs at age 73. The amount is calculated based on IRS life expectancy tables.
Roth IRAs: No RMDs for the original owner, making them excellent for estate planning.
RMD Calculation: IRA balance on December 31 of previous year ÷ Life expectancy factor from IRS tables.
| IRA Type | Contributions | Earnings | Exceptions to 10% Penalty |
|---|---|---|---|
| Traditional | Always taxed + 10% penalty | Always taxed + 10% penalty | First home, education, medical expenses |
| Roth | Always tax-free | 10% penalty if before 59½ | 5-year rule applies to earnings |
| Feature | SEP IRA | SIMPLE IRA |
|---|---|---|
| Eligibility | Any size business | 100 or fewer employees |
| Contribution Limit | 25% of compensation or $70,000 | $16,000 + $3,500 catch-up |
| Employer Match | Not required | Required (up to 3%) |
| Employee Contributions | No | Yes |
| Administrative Costs | Very low | Low |
Stocks and Stock Mutual Funds: Higher potential returns but more volatility. Suitable for long-term growth.
Bonds and Bond Funds: Lower volatility with steady income. Good for capital preservation.
Target-Date Funds: Automatically adjust allocation based on retirement date. Good for hands-off investors.
ETFs (Exchange-Traded Funds): Low-cost, diversified options with flexibility of individual stocks.
Beneficiary Designations: Keep beneficiary information current. IRAs pass directly to beneficiaries, bypassing probate.
Stretch Provisions: Under the SECURE Act, most non-spouse beneficiaries must withdraw within 10 years.
Spouse Beneficiaries: Can treat inherited IRA as their own or maintain as inherited IRA.
Excess Contributions: Contributing more than the annual limit results in 6% penalty per year until corrected.
Missing RMDs: Penalty is 25% of the amount that should have been withdrawn (reduced to 10% if corrected quickly).
Early Withdrawals: 10% penalty plus regular income tax can significantly reduce retirement savings.
Not Maximizing Employer Match: In SIMPLE IRAs, always contribute enough to get the full employer match.
Our traditional IRA vs Roth calculator compares after-tax retirement values based on your current tax rate, expected retirement tax rate, and time horizon. The calculator shows which option provides more money in retirement, accounting for tax benefits and contribution limits. For additional retirement planning, consider our budget calculator to determine available contribution amounts.
The IRA contribution limits calculator 2025 shows $7,000 for under age 50 and $8,000 for age 50+ for both Traditional and Roth IRAs. These limits apply to your combined contributions across all Traditional and Roth IRAs you own. For current IRS guidelines, visit IRS retirement plan limits.
The early IRA withdrawal penalty calculator applies a 10% penalty plus regular income tax on withdrawals before age 59½. For a $10,000 early withdrawal in the 22% tax bracket, you'd pay $1,000 penalty plus $2,200 in taxes, keeping only $6,800. For debt management alternatives, check our debt consolidation calculator before tapping retirement funds.
The IRA tax benefits calculator demonstrates that Traditional IRAs provide immediate tax deductions (up to $7,000 in 2025) but require taxes on withdrawals. Roth IRAs offer no immediate deduction but provide completely tax-free growth and withdrawals in retirement. For comprehensive financial planning, explore our complete financial calculator suite.
Our retirement savings calculator IRA uses compound interest formulas with your specified return rates and contribution patterns. While market returns vary, the calculator provides realistic projections based on historical averages and your specific inputs for planning purposes.
Yes, you can contribute to both Traditional and Roth IRAs in the same year, but your combined contributions cannot exceed the annual limit ($7,000 or $8,000 in 2025). Our calculator can model different splitting strategies to optimize your tax benefits. For additional investment planning, consider our loan calculator to manage debt before increasing retirement contributions.
IRA contribution limits calculator results depend on your age (50+ catch-up contributions), income level (Roth phase-out limits), and workplace retirement plan participation (Traditional IRA deduction limits). High earners may face reduced or eliminated contribution eligibility.
The early IRA withdrawal penalty calculator accounts for penalty-free withdrawal exceptions including first-time home purchase ($10,000 lifetime limit), qualified education expenses, and hardship withdrawals. However, regular income taxes still apply to Traditional IRA withdrawals. For home buying calculations, use our mortgage calculator to plan purchase financing. Learn more about IRA rules at Schwab's IRA center.