IRA Calculator Project Traditional vs. Roth IRA growth, plan Backdoor Roths, and model RMDs — with 2025 IRS rules and tax...
IRA Calculator
Project Traditional vs. Roth IRA growth, plan Backdoor Roths, and model RMDs — with 2025 IRS rules and tax analysis.
Traditional
Roth
Backdoor Roth
RMD & Withdrawals
$0
Projected Balance
$0
After-Tax Value
$0
Annual RMD (at 75)
$0
Tax Advantage
Traditional vs. Roth Growth
How IRAs Work
Traditional IRA**:
- Pre-tax contributions (deductible if eligible)
- Tax-deferred growth
- Taxed as ordinary income at withdrawal
- RMDs start at age 73 (SECURE 2.0)
Roth IRA**:
- After-tax contributions (no deduction)
- Tax-free growth and withdrawals (after 59½ + 5-yr rule)
- No RMDs during owner’s life
Formula for Growth**:
$$FV = P \frac{(1 + r)^n - 1}{r} + C(1 + r)^n$$
Where $P$ = annual contribution, $C$ = current balance, $r$ = return, $n$ = years.
IRA Red Flags
⚠️ Critical mistakes to avoid:
- Pro-Rata Rule (Backdoor Roth)** — If you have pre-tax IRA money, conversions are partially taxable
- Missed RMDs** — 25% → 10% penalty (if corrected promptly)
- Excess Contributions** — $1,000 penalty/year until corrected
- Roth 5-Year Rule** — Earnings tax-free only after 5 years from first contribution
✅ Pro Tips**:
- Backdoor Roth**: Roll old pre-tax IRAs into 401(k) first to avoid pro-rata tax
- RMD Planning**: Delay Social Security to reduce taxable income in RMD years
- QCDs**: At 70½+, donate RMD directly to charity (tax-free)
2025 IRA Benchmarks
| Metric | Value |
|---|---|
| Contribution Limit (<50) | $7,000 |
| Contribution Limit (≥50) | $8,000 |
| Roth Phaseout (Single) | $150K–$160K |
| RMD Age | 73 (72 if born before 1951) |
| Catch-Up (60–63) | $10,000 ($3K extra) |
📉 Growth Example** ($7K/yr, 30 yrs, 7% return):
- Traditional**: $720K pre-tax → $562K after 22% tax
- Roth**: $720K tax-free
- → Roth wins if future tax bracket ≥ 12%
How to Use This Calculator
➡️ Traditional IRA
See tax-deferred growth and RMD impact — with current tax deduction.
➡️ Roth IRA
Model tax-free growth — compare to Traditional using future tax bracket.
➡️ Backdoor Roth
Check eligibility and plan high-income contributions ($175K AGI → $7K Roth).
➡️ RMD & Withdrawals
Calculate mandatory distributions and tax impact at 73+.
Note: Uses 2025 IRS limits, life expectancy tables (Uniform Lifetime), and tax brackets.