IRA Calculator

About the IRA Calculator

An IRA is not a smaller 401(k). Three things make it a genuinely different problem.

There is no employer match. The guaranteed return that dominates every 401(k) decision is simply absent, and what replaces it as the important question is ordering — with a limited amount to save, which account takes the next pound.

Eligibility phases out with income, and not as a cliff. The allowed contribution is reduced proportionally across a band, so someone halfway through it can still contribute half.

The limits are low. Low enough that where the money goes matters more than what it grows at.

This IRA calculator handles all three, and leads with the eligibility position rather than the projected balance.

How to Use the IRA Calculator

Enter your income — modified adjusted gross income, which is what the phase-out is measured against — your age, and what you want to contribute.

The limit, catch-up and phase-out band are inputs rather than fixed figures, because legislation changes them most years and a hard-coded number becomes quietly wrong without anything appearing to fail. Check the current ones and enter them.

Step-by-Step Example

$90,000 income, age 35, contributing $7,000, $20,000 already saved, 30 years at 7%.

  Limit at 35:                      7,000.00
  Income 90,000 (below the band):   full limit available

  After 30 years:                 873,979.70
    Your own money:               230,000.00
    Growth:                       643,979.70

Straightforward. The interesting cases are the ones where income gets involved.

The Phase-Out Is a Ramp, Not a Cliff

This is the part most calculators get wrong, and it is exactly where people need an accurate answer.

At an income of $157,500, against a band running $150,000 to $165,000:

  Position in the band:  50% of the way through
  Allowed contribution:  7,000 × 50%  =  3,500.00

Not $7,000. Not zero. $3,500.

Being told "you are not eligible" when you are actually entitled to $3,500 is a real cost, and being told you can contribute the full amount when you cannot is worse — excess contributions carry a penalty for every year they remain in the account.

Where an IRA Belongs in the Order

With limited money, the usual sequence is:

1. The 401(k), up to the full employer match. This is first because it is the only guaranteed return available. A 50% match is an immediate 50%; nothing in an IRA competes with that.

2. The IRA. Workplace plans typically offer a short menu of funds at whatever fees the plan negotiated. An IRA generally offers the whole market at whatever fees you choose, and over thirty years that difference is substantial.

3. Back to the 401(k), up to its limit. Which is several times the IRA limit, so this is where most of the volume goes.

The ordering matters more than the growth assumption, because it is the part you actually control.

If You Earn Too Much

Above the top of the band, a direct Roth contribution is not available at all.

A traditional IRA has no income limit on contributions — only on whether they are deductible. That distinction is what the conversion route rests on, and it is worth taking advice on rather than reading about, particularly if you hold other pre-tax IRA money, because that complicates the tax treatment considerably.

The calculator says when you are in this position rather than silently showing you a projection you cannot actually have.

Traditional or Roth?

The same question arises here as in a 401(k), and the same answer holds: at an identical tax rate the two produce identical results, because it makes no difference whether the tax is taken before or after the growth.

What differs between the two IRA types is who is restricted and how.

Roth contributions are restricted by income, which is the phase-out band above. Withdrawals in retirement are tax-free.

Traditional contributions have no income limit at all. What income affects is whether they are deductible — and only if you or a spouse are covered by a workplace plan. Withdrawals are taxed.

So a high earner with no workplace plan can often deduct a traditional contribution in full while being unable to make a Roth contribution at all, and a high earner with a workplace plan may be able to do neither. The rules stack in ways that are worth checking against your specific position rather than assuming.

The decision itself, once eligibility is settled, is the same bet: a lower expected tax rate in retirement favours traditional, a higher one favours Roth.

Understanding Your Result

Projected balance is the compounded figure at whatever you are actually allowed to contribute — not what you asked for.

What you can contribute is the eligibility answer, with the phase-out reduction named if it applies.

What you are contributing flags any gap between what you wanted and what is allowed, and separates a phase-out reduction from simply asking for more than the limit.

Yours against growth splits the balance.

Worth knowing is the next action: the ordering, the conversion question, or the excess-contribution warning.

When Should You Use This Calculator?

Before setting up a contribution. Particularly if your income is anywhere near the band.

After a pay rise. Crossing into the band changes what you are allowed to do, and nobody tells you.

When deciding between accounts. The ordering section is the answer for most people.

At the start of each tax year. The limits and bands usually move.

Common Mistakes

Treating the phase-out as a cliff. You keep a proportional share inside the band.

Contributing before capturing the employer match. The match is guaranteed; nothing in an IRA is.

Over-contributing. The penalty applies for every year the excess stays in.

Using last year's limits. They change most years.

Assuming an IRA beats a 401(k). On fees and choice usually yes; on limits and on the match, no. Use both, in order.

Ignoring fees inside whichever account you choose. Over thirty years they do more damage than the difference between the accounts — the investment calculator shows how much.

Contribution limits, phase-out bands and tax rules change and vary by filing status. Every figure here is an estimate for planning, not tax advice.