Estimate your retirement savings growth with real-time projections
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A Traditional IRA (Individual Retirement Account) is a powerful retirement savings vehicle that offers tax-deferred growth. Understanding how to use it effectively can significantly impact your retirement readiness.
Start by entering your current age and when you plan to retire. The calculator will show how many years you have to contribute. Next, input your current IRA balance (if any) and how much you plan to contribute annually. Don't forget to adjust the expected annual return based on your investment strategy - conservative investors might use 5-6%, while more aggressive investors might use 7-8%.
The tool will automatically calculate your projected retirement savings, showing both your total contributions and the investment growth. Pay special attention to the annual tax savings calculation, which shows how much you're saving on taxes each year by contributing to a Traditional IRA.
For 2025, the IRS allows contributions up to $7,000 annually, or $8,000 if you're age 50 or older (catch-up contributions). These limits are subject to income phase-outs if you or your spouse are covered by a retirement plan at work.
Traditional IRAs are particularly beneficial if you expect to be in a lower tax bracket during retirement than you are now. The tax deduction today provides immediate savings, while the tax-deferred growth allows your investments to compound without annual tax drag.
If your employer doesn't offer a retirement plan, or if you've maxed out your 401(k), a Traditional IRA can be an excellent way to save additional retirement funds while reducing your current tax bill.