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IRA Calculator – How Large Can Your Account Grow?

Written by:
PK

On this page is an IRA calculator you can use to model and estimate the balance of your IRA over time. Enter details of your current IRA balance, age, retirement plans, and estimate future real returns and the tool will model your IRA growth and allow you to export the details for further research.

IRA Estimation Calculator

Using the IRA Calculator

The IRA was first introduced with the Employee Retirement Income Security Act of 1974 as a portable plan to allow workers to contribute to a retirement plan outside their day job. Further features – such as the SEP-IRA ("Simplified Employer Pension") introduced in 1978 – allowed employer contributions, but the IRA's main selling point is as a tax-advantaged plan separate from your main job.

There are two types of IRA, the traditional IRA – where taxes are deferred until you withdraw any gains – or the Roth IRA – where taxes are paid upfront and all gains are tax-free. For both plans, the benefits are excellent... you don't need to pay interim taxes on any gains made while the funds are still in the account.

This tool lets you model how large your investment might grow if you diligently add to your account over a career. No matter the style of IRA you choose, IRAs are an excellent vehicle for growing your wealth. To that end, there is an IRA contribution limit, but due to various rollover possibilities, the DQYDJ tool does not cap how much you can contribute a month (if you aren't taking advantage of a backdoor you should cap your contribution at the IRA max).

IRA Planning Tool Inputs

To use the IRA modeling tool, you'll have to make some estimates about the future and fill in details about your current status:

Current IRA Plan Inputs

  • Current IRA Balance: If you currently have some money in your IRA(s), enter the amount here.
  • Current Age: How old are you now?
  • Retirement Age: What age do you think you'll retire? (Don't worry, it's not a test – you can rerun the tool as often as you'd like to model different retirement ages.)
  • Monthly Contribution: How much you plan to invest a month into the IRA. Don't worry about inflation increases in the future; if you use real (after inflation) return in the following field, it'll cancel out any future CPI-measured inflation (useful if you are planning to max your IRA).

Future Assumptions

As we often say here on the site, your assumption is probably wrong – but it can still be useful.

You do need to guess how your investments will return over time here. The S&P 500 historical return calculator might be a good guide if you invest in stocks, and in that case, 5, 6, or 7% returns are a "reasonable ballpark" here. For safety, perhaps use the Treasury Return Calculator's numbers (perhaps 1-2% real returns?).

  • Investment Return Annually – Real: Enter the percentage your IRA investments will return every year.

IRA Calculator Outputs

You can either see summary statistics modeling your 401(k) or 403(b) or increase the resolution and graph your projections.

Simple IRA Calculation

To see the summary, click the blue 'Project IRA Balance' button. You'll then see an estimated balance, plus a breakdown of how we got to the total.

  • Balance at Retirement: Our best estimate of the total balance in your IRA when you retire. Notably, this is an inflation-adjusted amount if you used a real return estimate, so the actual numerical balance would be higher (the number then shows what you could afford "today").
  • Starting Balance: The part of the balance attributable to the initial investment.
  • Your Total Contribution: Your total contributions to the IRA in cash over the time modeled.
  • Market Gains: Our best guess at market gains over the remaining years in your career.

Advanced Calculation

If you hit the "Project & Draw" button, you will see the above outputs and a graph of your annual balance, including the running breakdown of all sources. If you hover over an age, you'll see our estimate for your balance that year plus what funding sources contributed to the balance.

If you click the upper right 'hamburger' menu, you can export the projection data. Choose to export svg or png for a graphical representation of the estimate, or use the csv option to model results further in your favorite spreadsheet program.

Default scenario projection for the IRA calculator
Example IRA Calculator output for the default scenario

IRAs: Excellent Tax Planning Tools

Traditional IRAs are best used when you think your tax rate might fall in the future – they let you defer today's taxes to some future regime's tax rates. Roth IRAs are the opposite – you pay today's tax rate but never have to pay tax again.

When you combine the tax treatment of IRAs, the ability to rollover from 401(k)s, and the ability to contribute or convert (which effectively means anyone can contribute), sometimes folks' results and balances get controversial. 

In 2014, the Government Accountability Office noted that nearly 10,000 people had IRA balances of $5,000,000 or more at year-end 2011. In Mitt Romney's 2012 Presidential run, his massive (traditional) IRA balance was controversial. In 2021, ProPublica leaked the balances of some other IRAs – including a $5 billion Roth IRA controlled by Peter Thiel, $250+ million Roth IRAs owned by Berkshire Hathaway's Ted Weschler and hedge fund manager Randall Smith, and $20+ million IRAs controlled by Warren Buffett and hedge fund manager Robert Mercer. (Some of those were aided by a Roth IRA Conversion).

Staggering amounts, for sure – and now, you can model what sort of returns it'd take to match them (read: excellent results over a very long time. Don't count on it!)

Whether your IRA balance ends up at an incredible terminal value, or you realize a more typical return, it's worth having an IRA (or multiple!) in your pocket for tax planning. When you make it to retirement, it's helpful to have a variety of buckets to withdraw from – pre-tax, post-tax, fully taxed, and so on. Hopefully, this tool helps you model what might be possible from your IRA.

See some other valuable tools which can help with your retirement estimates:

Don't Quit Your Day Job...

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