How it works

A useful distinction

Equal tax rates reveal the baseline

With zero opening balances, equal pretax resources, identical growth and equal current and retirement tax rates, deductible traditional and qualified Roth outcomes match in the equal-cost model. Changing the tax rates reveals the modeled advantage.

Keeping IRA contribution and tax assumptions aligned

The IRA modes cover different planning questions, including account growth, contribution ceilings, and supported distributions. Select the branch that matches the tax year and account scenario before entering values. The equal-budget comparison is useful when tax treatment changes how much can be contributed from the same pretax resources. Read the mode's limitations before using an estimate in a tax or withdrawal decision.

Account growth: formula and assumptions

Grow the existing balance and annual end-of-year employee and employer contributions.

Contributions are scenario inputs. This mode does not establish eligibility, apply every statutory limit, or model investment fees.

Early withdrawal estimate: formula and assumptions

Net proceeds = gross withdrawal×(1−tax rate−penalty rate).

Exceptions and tax treatment depend on age, account type, contribution basis, and qualifying circumstances. Enter the applicable rates.

Equal pretax-budget comparison: formula and assumptions

Roth contribution = pretax budget × (1−current tax). Traditional spendable balance = pretax future value × (1−withdrawal tax).

Compare the same pretax resources. This manual scenario assumes deductibility and qualified Roth distributions; annual contribution caps and income restrictions are evaluated separately.

2026 combined contribution ceiling: formula and assumptions

2026 ceiling = min(eligible compensation, $7,500 + $1,100 if age 50 or older).

Traditional and Roth contributions share the combined annual ceiling. This simple ceiling is before MAGI restrictions, deductibility and other eligibility rules.

Dated traditional-account distribution: formula and assumptions

Additional tax = 10% × taxable amount not covered by an applicable exception.

Uses exact age 59½ and the qualified-plan separation-year age-55 rule. IRA separation does not qualify. Taxable basis and other exception eligibility are user-supplied assumptions; income tax is separate.

Worked example

Reference example currency: USD. These fixed examples do not change with your calculator preferences.

Using the Account growth example:

Inputs

Current balance ($): 50000
Annual employee contribution ($): 10000
Annual employer contribution ($): 3000
Annual effective return (%): 5
Years: 20
Tax rate on retirement withdrawals (%): 20

Method

Grow the existing balance and annual end-of-year employee and employer contributions.

Result

Example result

Projected account balance: $562,522.29

Illustrative after-tax balance: $450,017.83

Total contributions: $310,000.00

These are illustrative inputs. Change the values to explore a different scenario.

What to keep in mind

The 2026 ceiling mode compares compensation and the age-based combined IRA cap; it does not determine MAGI eligibility or deductibility. Dated distributions cover the stated traditional-account rules; Roth ordering and special account rules are excluded.

Formula references

References explain the underlying methods; they do not imply endorsement or individual professional review of Finflo.

Common questions

Does the IRA ceiling determine deductibility or full eligibility?

No. It compares eligible compensation with the age-based combined ceiling, before MAGI restrictions, deductibility and other eligibility rules.

What does an equal pretax-budget comparison change?

It reduces the Roth contribution by the assumed current tax, then compares it with traditional savings after the assumed withdrawal tax.

Does leaving an employer at age 55 create an IRA exception?

The dated mode applies its separation-year exception only to the relevant qualified employer plan, not to an IRA. Other exceptions must be separately established.

Prepared by Finflo. See our methodology and editorial policy. Read the relevant professional-advice limitations.

IRA Calculator

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