This calculator
will assist you in deciding where your annual contributions provide the greater benefit:
in a Traditional IRA or in a Roth IRA. Please be sure to read all the instructions and
assumptions when using this calculator. You should also consult with a competent tax
advisor before making your final decision.
*Reflects Traditional IRA with tax savings attributable to deductible contributions
invested in a taxable, interest-bearing account.
The calculator on the left is designed for those currently in a 15% tax bracket, while the calculator on the
right is designed for those currently in a 28% tax bracket.
To use the calculator:
Select your age combined with your anticipated tax bracket at
retirement from the drop-down menu.
The first set of numbers compares the after-tax value of the Roth IRA and Traditional IRA if you were to take a
lump sum distribution at age 70.
The second set of numbers compares the after-tax amount
available on an annual basis assuming distributions beginning at age 70 over a 16-year
period.
The projections displayed in this calculator are based on an assumed annual yield of 8%
and $2,000 annual contributions made on the first day of each year up to age 70. All taxes
on Traditional IRA distributions are based on the "Anticipated Tax Bracket at
Retirement." All taxes on the investment of the tax savings associated with the
Traditional IRA (in the columns titled Trad IRA*) are based on the "Current Tax
Bracket" displayed at the top of the calculator during the accumulation phase (i.e.,
until age 70), and at the "Anticipated Tax Bracket at Retirement" during the
distribution phase (i.e., age 70 and beyond). Both the "Lump Sum" and the
"16-Year Payout" projections are based on distributions beginning at age 70. Lump
sum distributions are assumed to be made on the first day of the plan year. Annuity
distributions are assumed to be made on the last day of the year.
This calculator is intended as a comparison tool only and is not intended as a
substitute for tax or legal advice regarding an individual's retirement savings needs. The
projections are based on certain assumptions which may not accurately reflect an
individual's personal financial picture or goals. Individuals are advised to consult a
competent financial planner to assist them in determining which IRA product is best suited
to their personal financial situation.
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