Traditional IRA Calculator

Step 1: Enter Personal and Account Details

• Input your current age and planned retirement age
• Enter your existing Traditional IRA balance
• Specify your annual contribution amount (up to IRS limits)
• Set your expected annual investment return rate

Step 2: Configure Tax Parameters

• Enter your current marginal tax rate for immediate deduction benefits
• Input expected tax rate in retirement for distribution planning
• Adjust inflation rate for purchasing power analysis
• Consider income limits affecting deductibility

Step 3: Analyze Results and Tax Implications

The Bravo Calc will show your projected Traditional IRA value, current tax savings from deductible contributions, estimated taxes in retirement, net after-tax value, and detailed comparisons with Roth IRA scenarios to optimize your retirement tax strategy.

Future Value of Traditional IRA

Where: FV = Future Value, PV = Present Value (current balance), r = Annual return rate, n = Years to retirement, PMT = Annual contribution

Annual Tax Savings from Contributions

Immediate tax reduction from deductible Traditional IRA contributions

Retirement Tax Liability

Estimated total tax liability on Traditional IRA distributions in retirement

Required Minimum Distribution (RMD)

Mandatory annual withdrawals starting at age 73, based on IRS life expectancy tables

Net After-Tax Retirement Value

Actual spendable value after paying retirement income taxes

What are the 2024 Traditional IRA contribution limits?

For 2024, you can contribute up to $7,000 to a Traditional IRA ($8,000 if you're 50 or older). These contributions may be tax-deductible depending on your income and whether you have an employer retirement plan. Deductibility phases out at higher income levels if you're covered by a workplace plan.

When should I choose Traditional over Roth IRA?

Choose Traditional IRA if you're in a high tax bracket now and expect to be in a lower bracket in retirement, you need the current tax deduction for cash flow, you're in peak earning years, or your income is too high for Roth IRA contributions. Traditional IRAs excel when current tax rates exceed retirement rates.

How do Required Minimum Distributions work?

Starting at age 73, you must withdraw a minimum amount annually from Traditional IRAs based on IRS life expectancy tables. The RMD amount is calculated by dividing your account balance by your life expectancy factor. Failure to take RMDs results in a 50% penalty on the amount not withdrawn.

Can I deduct Traditional IRA contributions if I have a 401(k)?

Deductibility depends on your income level. For 2024, if you're covered by a workplace plan, deductibility phases out between $73,000-$83,000 for single filers and $116,000-$136,000 for married filing jointly. Above these ranges, you can still contribute but without a tax deduction.

What happens if I withdraw from a Traditional IRA early?

Withdrawals before age 59½ are subject to ordinary income tax plus a 10% early withdrawal penalty. Exceptions include first-time home purchases ($10,000 lifetime limit), qualified education expenses, medical expenses exceeding 7.5% of AGI, and certain unemployment situations.

Should I convert my Traditional IRA to a Roth IRA?

Roth conversions make sense if you can pay conversion taxes from outside funds, you're temporarily in a low tax bracket, you want to reduce future RMDs, or you expect tax rates to increase. Generally beneficial if your current tax rate is equal to or lower than your expected future rate. Consider multi-year conversion strategies to manage tax brackets.