IRA Calculator Guide
What is an IRA?
An Individual Retirement Account (IRA) is a tax-advantaged account designed to help you save for retirement. There are two main types: Traditional IRA and Roth IRA, each with different tax benefits and rules.
2025 IRA Contribution Limits
Traditional/Roth IRA:
$7,000
Age 50+ Catch-up:
$8,000
SEP IRA:
$69,000
SIMPLE IRA:
$16,000
You must have earned income to contribute. Roth IRA eligibility phases out at higher incomes.
Traditional vs Roth IRA
Traditional IRA
Contributions may be tax-deductible. Withdrawals taxed as income in retirement. Required Minimum Distributions (RMDs) start at age 73.
Roth IRA
Contributions are made after-tax. Qualified withdrawals are tax-free. No RMDs during owner's lifetime.
Required Minimum Distributions (RMDs)
Traditional IRA: RMDs begin at age 73
Roth IRA: No RMDs for original owner
Penalty: 25% penalty for missed RMDs (can be reduced to 10% if corrected)
Tax Implications
- • Traditional IRA: Deduct contributions now, pay taxes on withdrawals
- • Roth IRA: No deduction now, withdrawals are tax-free
- • Early withdrawals (before age 59½) may incur a 10% penalty plus income tax
💡 IRA Optimization Tips
- • Max out contributions each year if possible
- • Consider Roth conversions in low-income years
- • Use catch-up contributions if age 50+
- • Plan withdrawals to manage tax brackets in retirement
- • Coordinate IRA strategy with other retirement accounts
🤝 When to Get Professional Help
Financial Advisor: For investment selection and withdrawal strategies
Tax Professional: For Roth conversions, RMDs, and tax planning
Estate Attorney: For beneficiary designations and inherited IRA rules
This calculator provides estimates only. Consult professionals for personalized advice.