A traditional IRA lets you make pre-tax contributions that reduce your taxable income today, with tax-deferred growth until retirement when withdrawals are taxed as ordinary income. Our calculator shows your projected balance, required minimum distributions, and tax impact across different scenarios.
For 2024, you can contribute up to $7,000 to a traditional IRA, or $8,000 if you are 50 or older. However, deductibility of contributions depends on whether you have a workplace retirement plan and your income.
If neither you nor your spouse has a workplace retirement plan, contributions are fully deductible regardless of income. If you do have a workplace plan, deductibility phases out between $77,000 and $87,000 (single) or $123,000 and $143,000 (married, 2024).
Under SECURE 2.0, RMDs must begin at age 73. The annual amount is calculated using your account balance and IRS life-expectancy tables. Missing an RMD triggers an excise tax of 25% of the amount not withdrawn.
Withdrawals before age 59½ are subject to a 10% early withdrawal penalty plus ordinary income taxes. Exceptions include first-time home purchases (up to $10,000 lifetime), qualified education expenses, and substantially equal periodic payments (SEPP).
Yes. You can contribute to both in the same year, up to each plan's annual limit. However, contributing to a workplace 401(k) may limit your ability to deduct your traditional IRA contribution based on your income.
A traditional IRA is generally better if you expect to be in a lower tax bracket in retirement. A Roth IRA is better if you expect higher taxes later or want tax-free growth. Many savers use both to diversify their tax exposure.