This Traditional IRA Calculator will help readers to achieve the retirement goals as you can input various sum of savings that suits you to achieve a particular retirement kitty. As you know ,the traditional IRA is one of type of 401(k)retirement plans, tax deduction is allowed in the contribution year and you pay taxes when you make withdrawals during your retirement years.To know more about Traditional IRA from IRS website go to Traditional IRA.
What is an IRA Account?
An Individual Retirement Account (IRA) is an investment account primarily meant as a retirement savings with a financial institution . The are three main types of IRAs which are summarised below:
- Traditional IRA – your contributions is tax deductible and any earnings is taxed only at the time of withdrawal .
- Roth IRA – The contributions are from money which are already taxed, therefore retirement kitty potentially grow tax-free. No tax at the time of withdrawals provided that certain conditions are met. Here is our Roth IRA calculator.
- Rollover IRA – The term “rolled over” is used because you shift your IRA accumulated savings from a qualified retirement plan into this traditional IRA. Rollovers involve moving eligible assets from an employer-sponsored plan, such as a 401(k) or 403(b), into an IRA.
Traditional IRA withdrawal calculator
Input Terms Used in IRA Calculator
- Tax Bracket: Enter your current tax bracket and estimated tax bracket at the time of retirement.
- Years of contribution :number of years you will pay for your retirement plan.
- Years of Withdrawal : number of years you will withdraw your invested money along with the gains on your investment.
- Yearly Contributions: Yearly contributions means the amount you will invest on yearly basis.
- Yearly Rate of Return: As per plan ,input yearly rate of return.
As per Merriam-Webster dictionary , definition of IRA is as under :
a retirement savings account in which income taxes on certain deposits and on all gains are deferred until withdrawals are made