Calculators


Got a question that involves number crunching? Use the calculators on this page to find the mathematical answer to the most commonly asked number-crunching questions, and see your inputs displayed next to the graph, chart, and/or table output in a side-by-side display.

Calculator: Print This Page
Traditional vs. Roth IRA Calculator
Years

*How old you will be as of December 31st of this year

*Must be at least one year greater than your current age and less than 71

*This overrides annual IRA contribution entry

$

Both traditional and Roth IRAs feature tax-sheltered growth of earnings. And both potentially give you a wide range of investment choices. However, there are important differences between these two types of IRAs. Assuming that you qualify to make both Roth IRA contributions and deductible contributions to a traditional IRA, the most appropriate choice depends on your personal financial situation. Use this calculator as a starting point in your analysis.




Contribution limits:

Tax year beginning inContribution limits (under age 50)Additional catch-up contribution limits (age 50 or over)
2013 - 2018$5,500$1,000
Traditional vs. Roth IRA Chart
These charts illustrate after-tax values and accumulation by year, based on the supplied data and the assumptions that follow.

Given your current and projected federal income tax rates, you might consider making deductible contributions to a traditional IRA, and investing the resulting tax savings.

By the time you reach retirement age, you would have accumulated $239,133 in a Roth IRA. Since qualifying distributions are free from federal income tax, this amount is not reduced by federal income tax. While you would also have accumulated $239,133 in a Traditional IRA, the after-tax value of the Traditional IRA would be $191,306. Assuming that you invested all tax savings attributable to your traditional IRA contributions in a taxable account that earned exactly 6%, you would have accumulated a total of $50,507 in the taxable account by the year you reach retirement age. The combined after-tax value of your traditional IRA and your taxable account would be $241,813.



    Assumptions

  • This is a hypothetical example of mathematical principles intended for illustration purposes only, and does not represent the performance of any specific investment or portfolio, nor is it an estimate or guarantee of future value. The calculations above assume that earnings are compounded annually. The calculation also assumes that all contributions made to the traditional IRA are deductible, and made at the beginning of each year. It is also assumed that your ability to contribute to a Roth IRA is not limited by your income.
  • Investment fees and expenses have not been deducted. If they had been, the results would have been lower. When making an investment decision, investors should consider their personal investment horizons and income tax brackets, both current and anticipated, as these may further impact the results of this comparison. This illustration assumes a fixed annual rate of return; the rate of return on your actual investment portfolio will be different and will vary over time, according to actual market performance. This is particularly true for long-term investments. It is important to note that investments offering the potential for higher rates of return also involve a higher degree of risk to principal.
  • This illustration assumes that all distributions made from the Roth IRA qualify for tax-free treatment. To qualify for tax-free treatment, a Roth IRA must meet a five-year holding period requirement, and the distribution must take place after age 59½, or due to the owner’s death, disability, or a first-time home purchase (up to a $10,000 lifetime maximum).
  • This illustration calculates the after-tax value of the traditional IRA by applying the appropriate tax rate (the anticipated tax rate in retirement for the year of retirement, the current federal income tax rate for years prior to the year of retirement) to the entire traditional IRA balance, and does not account for the possible application of the additional 10% additional penalty tax described below. The calculator assumes that all tax savings resulting from deductible traditional IRA contributions are invested in a taxable account. The amount of the taxable account is adjusted annually to reflect both earnings and taxes attributable to the taxable account's earnings, at the current federal income tax rate provided.
  • Withdrawals from traditional IRAs are subject to federal income tax to the extent they consist of deductible contributions and investment earnings. Withdrawals from Roth IRAs that do not qualify for tax-free treatment are subject to federal income tax to the extent they consist of investment earnings. A 10% additional penalty tax may also apply to withdrawals made prior to age 59 1/2 (some exceptions apply).
  • Mandatory annual minimum withdrawals from traditional IRAs are required after age 70½; there are no mandatory lifetime annual withdrawals required for Roth IRAs. Beneficiaries of either type of IRA are required to take certain minimum distributions.
©2018 Broadridge Investor Communication Solutions, Inc. All rights reserved.
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CWA Asset Management Group, LLC is a SEC-registered investment adviser, doing business as Capital Wealth Advisors and as blueharbor wealth advisors.  Fundamental Global Investors, LLC is a SEC-registered investment adviser that is affiliated with CWA Asset Management Group, LLC. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.  Investments involve risk and unless otherwise stated, are not guaranteed. Nothing herein should be interpreted as investment advice. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Specific companies or securities described in this report are meant to be illustrative of investment style. Such case studies are not meant to be, and may not be, representative of any portfolio or holdings of CWA Asset Management Group, LLC, or Fundamental Global Investors, LLC.

Please note that past performance is not indicative of future results.

This material is solely for informational purposes and is intended only for the named recipient. Nothing contained herein constitutes investment, legal, tax or other advice nor is it to be relied on in making an investment or other decision.

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

 



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