What is the 2026 IRA contribution limit?

For 2026, the IRA contribution limit is $7,000 per year for individuals under age 50. If you are 50 or older, you can contribute $8,000 (an extra $1,000 catch-up contribution). These limits apply to the total across all your IRAs — you cannot contribute $7,000 to a Traditional IRA and $7,000 to a Roth IRA in the same year. The limit is also capped at your earned income for the year.

What is the difference between a Traditional IRA and a Roth IRA?

The key difference is when you pay taxes. Traditional IRA contributions are often tax-deductible now, reducing your current taxable income, but withdrawals in retirement are taxed as ordinary income. Roth IRA contributions are made with after-tax dollars — no upfront deduction — but all qualified withdrawals in retirement are completely tax-free. If you expect to be in a higher tax bracket in retirement, Roth is typically better; if you expect a lower bracket, Traditional often wins.

How much will an IRA grow over 30 years?

At the maximum $7,000/year contribution with a 7% annual return, an IRA grows to approximately $661,000 over 30 years (starting from $0). With a $10,000 existing balance, the total reaches roughly $737,000. These figures illustrate why maximizing contributions early and consistently is so powerful — total contributions would only be $210,000, but the account more than triples from compound growth.

Who can contribute to a Roth IRA?

Roth IRA eligibility phases out at higher incomes. For 2026, the Roth phase-out range is $146,000–$161,000 for single filers and $230,000–$240,000 for married filing jointly. Above those thresholds, you cannot contribute directly to a Roth IRA. However, a "backdoor Roth" — contributing to a non-deductible Traditional IRA and then converting it — is a legal workaround available to high earners regardless of income.

When can I withdraw from an IRA without penalty?

The standard penalty-free withdrawal age for IRAs is 59½. Withdrawals before that trigger a 10% early withdrawal penalty plus ordinary income tax (Traditional) or just income tax on earnings (Roth). Roth IRA contributions (not earnings) can be withdrawn at any time penalty-free since they were already taxed. Required Minimum Distributions (RMDs) start at age 73 for Traditional IRAs; Roth IRAs have no RMDs during the owner's lifetime.

Should I choose a Traditional or Roth IRA?

The general rule: choose Roth if you expect to be in a higher tax bracket in retirement than you are today (common for young earners early in their careers). Choose Traditional if you expect a lower bracket in retirement (common for high earners approaching peak salary). When uncertain, splitting contributions between both provides tax diversification. A financial advisor can run the exact break-even analysis for your specific situation.

What is a Roth IRA conversion and when does it make sense?

A Roth conversion means transferring money from a Traditional IRA (or 401k) to a Roth IRA, paying income tax on the converted amount now in exchange for tax-free withdrawals later. It makes sense when your current tax rate is unusually low — during a gap year, early retirement, or a year of large deductions. Converting in a low-income year minimizes the tax bill. This calculator models the growth side; a tax advisor can help time conversions.

IRA Calculator — Balance, Growth & Tax Savings

Calculates Traditional and Roth IRA balance at retirement, total growth, and estimated tax savings for any contribution and time horizon.

How to Use This IRA Calculator

This IRA calculator compares Traditional and Roth IRA growth so you can see the long-term impact of your contribution strategy. Select your IRA type (Traditional or Roth), then enter your current age, retirement age, annual contribution, current IRA balance, and expected annual return. For Traditional IRAs, also enter your current tax bracket to see estimated annual and lifetime tax savings. The calculator instantly shows your projected balance at retirement, total contributions, total growth, and tax impact. Use the share button to save a link to your exact scenario.

To model your Coast FIRE milestone alongside IRA growth, use our Coast FIRE calculator to see when your investments can sustain your retirement without more contributions.

IRA Growth Formula Explained

The IRA balance projection uses two standard compound interest formulas:

Future value of current balance: FV = Balance × (1 + r)^years

Future value of annual contributions (end-of-year): FV = Contribution × ((1 + r)^years − 1) / r

Where r = annual return as a decimal (e.g. 0.07 for 7%) and years = retirement age minus current age. Annual compounding is used here, consistent with how end-of-year IRA contributions work in practice.

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Traditional IRA vs. Roth IRA: The Tax Break-Even

The core decision between Traditional and Roth comes down to your tax rate now vs. in retirement. If your marginal tax rate is lower today than it will be in retirement, pay taxes now (Roth). If higher today, defer taxes (Traditional).

You are young (under 40) with modest income — Roth almost always wins. Your contributions are taxed at a low rate now, and decades of tax-free growth compound to a huge advantage.
You are in your peak earning years (40–55) — Traditional may win if you expect income to drop significantly in retirement.
You expect the same tax rate forever — the math is roughly equal; Roth wins on flexibility (no RMDs, easier estate planning).

Many advisors recommend splitting contributions for tax diversification — some in Roth, some in Traditional — so you can draw strategically from each account in retirement to minimize the tax bill in any given year.

2026 IRA Contribution Limits and Rules

For 2026, the IRA contribution limit is $7,000/year (under age 50) or $8,000/year (age 50+). Key rules:

Contributions cannot exceed your earned income for the year
Roth IRA eligibility phases out above $146,000 (single) / $230,000 (married filing jointly)
Traditional IRA deductibility phases out if you have a workplace plan and income above $79,000 (single) / $126,000 (married)
The annual limit is shared across all your IRAs — you cannot contribute $7,000 to both a Traditional and a Roth in the same year
The contribution deadline is Tax Day (April 15) of the following year

What Is a Roth Conversion and Is It Right for You?

A Roth conversion moves pre-tax money from a Traditional IRA (or 401k) to a Roth IRA. You pay ordinary income tax on the converted amount in the year of conversion, but all future growth is tax-free. Conversions are most advantageous in low-income years — early retirement before Social Security kicks in, a gap year, or a year with large deductible expenses. There is no income limit on conversions, making this the basis of the "backdoor Roth" strategy for high earners.

The growth side of any conversion scenario is what this calculator models well. Pair it with our future value calculator to compare post-conversion Roth growth against leaving funds in a Traditional IRA.

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IRA vs. 401(k): Do You Need Both?

Most financial advisors recommend this priority order for retirement savings:

401(k) up to employer match — free money; never leave this on the table
IRA (Roth or Traditional) — more investment options, often lower fees, and better withdrawal flexibility
401(k) up to the annual maximum — $23,500 in 2026 (under 50)
Taxable brokerage account — for savings beyond tax-advantaged limits

IRAs and 401(k)s are complementary, not competing. An IRA is always worth maximizing because of its investment flexibility and (for Roth) no required minimum distributions.

When Can You Withdraw From an IRA?

The penalty-free withdrawal age for IRA funds is 59½. Before that, the IRS imposes a 10% early withdrawal penalty in addition to ordinary income tax on the amount withdrawn (Traditional) or on earnings only (Roth). Exceptions to the penalty include first-time home purchase (up to $10,000 lifetime), higher education expenses, disability, and substantially equal periodic payments (Rule 72t). Roth contributions (not earnings) can always be withdrawn penalty-free since they were already taxed. Required Minimum Distributions begin at age 73 for Traditional IRAs.

Financial Disclaimer

This calculator is for planning and educational purposes only. It is not financial advice. Investment returns are not guaranteed. IRA contribution limits, income phase-out thresholds, and tax rules are subject to change by Congress. Consult a qualified financial advisor or tax professional before making IRA contribution, conversion, or withdrawal decisions.

IRA Calculator