HesapHanem

Traditional IRA Calculator

Enter the starting balance, contribution, return and years to project the IRA.

How it is calculated

The tool compounds the starting balance once a year and adds a stream of equal yearly contributions: FV = P × (1 + i)n + C × ((1 + i)n − 1) ÷ i, where P is the starting balance, C the contribution per year, i the annual return as a decimal (6% is 0.06) and n the number of years. Contributions are treated as made at the end of each year. At a return of 0% the formula becomes P + C × n. Contributions shown are P + C × n and growth is the future value minus that. The projection is before tax, taken as a flat return every year, and the tool does not check yearly contribution limits, withdrawals, required distributions or inflation. Starting balance and contribution may be left empty (0); the return and years are required.

Worked example

Start with 15,000, add 6,000 a year for 25 years at 6% a year. Growth factor: 1.0625 = 4.2919. The starting balance grows to 15,000 × 4.2919 = 64,378.06. The contribution stream is worth 6,000 × (4.2919 − 1) ÷ 0.06 = 329,187.07. Future value = 64,378.06 + 329,187.07 = $393,565.13. Money paid in is 15,000 + 6,000 × 25 = $165,000.00, so growth is $228,565.13, more than the contributions themselves.

Try this example →

Common mistakes

  • Reading the future value as spendable money. A traditional IRA is pre-tax, so withdrawals are normally taxed as income; the figure is not what you would receive after tax.
  • Entering the rate as 0.06. The field is in percent, so 0.06 is read as 0.06% a year and growth is almost nothing.
  • Entering the monthly contribution in the yearly field. If you save 500 a month, enter 6,000, not 500.
  • Forgetting that the projection uses a smooth return each year. Real markets move up and down, so the actual balance after 25 years can differ greatly in either direction; also try lower rates.
  • Ignoring the yearly contribution limits that your country's rules set. The tool accepts any amount, even one an account would not allow, as seen by entering 60,000 a year.

About this calculator

A Traditional IRA is a US retirement account funded with pre-tax contributions that grow tax-deferred — no capital gains or dividend tax is owed year to year, and the account holder only pays ordinary income tax when money is withdrawn in retirement. This projection compounds a starting balance plus regular annual contributions at an assumed rate of return over a chosen number of years, separating out how much of the ending balance came from contributions versus investment growth.

Financial planners, US retirement savers, and anyone comparing a Traditional IRA against a Roth IRA (which flips the tax treatment — after-tax contributions, tax-free withdrawals) use this kind of projection to see how contribution amount, time horizon, and expected return interact, since even modest differences in annual return compound significantly over a multi-decade retirement timeline.

Was this helpful?

You can pick up to 3 reactions.

Comments (1)

  • Editorial team

    The projected balance is pre-tax, so what you can spend in retirement is smaller once withdrawals are taxed as ordinary income. The tool also ignores annual contribution limits, deductibility rules, required minimum distributions and inflation, so the future value is in nominal terms. Check the current IRS limits before entering a yearly amount. Which return rate do you use when planning, and why?

Popular calculators

Loan Calculator

Monthly payment, total interest and full amortization schedule.

Percentage Calculator

Percent change, percent of, and ratio calculations.

Discount Calculator

Calculate final price, savings, and discount amount.

BMI Calculator

Body mass index from height and weight (metric or imperial).

Age Calculator

Compute your exact age in years, months and days from a birth date.

Compound Interest Calculator

Calculate the final amount and interest earned with compounding.

All Calculators