Financial Calculators at www.javacalc.com
Click here to put these Calculators on your website!
Home pageContact Us!Online Order FormFree TrialMore Information
New Financial Calculators
 Show all
 Mortgages
 Loans
 Credit Cards & Debt
 Auto
 Investments
 Retirement
 Taxes
 Savings
 Insurance
 Personal Finance
 Business
 Canadian
 French Canadian
 Spanish
 Australian Loans
 Australian Savings
Financial calculators for my website
 
Traditional IRA Calculator
Contributing to a traditional IRA can create a current tax deduction, plus it provides for tax-deferred growth. While long term savings in a Roth IRA may produce better after-tax returns, a Traditional IRA may be an excellent alternative if you qualify for the tax deduction.

This Financial Calculator requires SUN's Java™ Plug-in. If you see this message you will need to download SUN's Java™ Plug-in. This can be done automatically by clicking the yellow bar at the top of your browser and choosing “Install ActiveX Control”.

    You can also get SUN's Java™ Plug-in here: Get the Java™ Plug-in!

    For more information about this Plug-in please visit: SUN's Java™ Plug-in
    For more information about these retirement calculators please visit: Retirement Calculators from KJE Computer Solutions, LLC

Definitions

Annual contribution
The amount you will contribute to your Traditional IRA each year. This calculator assumes that you make your contribution at the beginning of each year. In 2013, the maximum annual IRA contribution was increased $500 to $5,500 per individual. It is important to note that this is the maximum total contributed to all of your IRA accounts. The contribution limit increases with inflation in $500 increments. An annual change to the contribution limit only occurs if the cumulative effect of inflation since the last adjustment is $500 or more.

If you are 50 or older you can make an additional "catch-up" contribution of $1,000. The "catch-up" contribution amount of $1,000 remains unchanged for 2012. In order to qualify for the "catch-up" contribution, you must turn 50 by the end of the year in which you are making the contribution.

Expected rate of return
The annual rate of return for your IRA. This calculator assumes that your return is compounded annually and your contributions are made at the beginning of each year. The actual rate of return is largely dependent on the types of investments you select. The S&P 500 for the 10 years ending Dec. 31st, 2012 had an annual compounded rate of return of 7.1%, including reinvestment of dividends. From January 1970 through the end of 2012, the average annual compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 10.1% (source: www.standardandpoors.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a bank may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.

It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that funds and/or investment companies may charge.

Current age
Your current age.

Age of retirement
Age you wish to retire. This calculator assumes that the year you retire, you do not make any contributions to your IRA. So if you retire at age 65, your last contribution happened when you were actually age 64.

Current tax rate
Your current marginal tax rate you expect to pay on your taxable investments.

Retirement tax rate
The marginal tax rate you expect to pay on your investments at retirement.

Adjusted gross income
What you anticipate your income to be. This is used to calculate whether you are able to deduct your annual contributions from your taxes. It is important to note that there are no income limits preventing you from contributing to a Traditional IRA. Annual income only affects your ability to make a tax deductible contribution.

Married
Check the box if you are married. This is used to determine whether you can deduct your annual contributions from your taxes.

Employer plan
Check the box if you have an employer sponsored retirement plan, such as a 401(k) or pension. This is used to determine if you can deduct your annual contributions from your taxes. For more information on how an employer plan can affect your IRA tax deduction, see the definition for non-deductible contributions, directly below.

Total non-deductible contributions
The total of your Traditional IRA contributions that were deposited without a tax deduction. Traditional IRA contributions are normally tax deductible. However, if you have an employer sponsored retirement plan, such as a 401(k), your tax deduction may be limited.

In 2013, for single tax filers with an employer sponsored retirement plan, an IRA contribution is fully tax deductible if your income is below $59,000. It is then prorated between $59,000 and $69,000. If your income is over $69,000 and you have an employer sponsored retirement plan, such as a 401(k), you receive no tax deduction. For married couples, the same rules apply except the deduction is phased out between $95,000 and $115,000.

This calculator automatically determines if your tax deduction is limited by your income. However, there are two unusual situations not automatically accounted for where additional tax phase-outs are applied. First, if your spouse has an employer sponsored retirement plan but you do not, your tax deduction is phased out from $178,000 to $188,000. Second, if you are married filing separately and have an employer sponsored retirement plan, the income phase-out is from $0 to $10,000.

Total contributions
The total amount contributed to this IRA.

IRA total before taxes
Total value of your IRA at retirement before taxes.

IRA total after taxes
Total value of your IRA at retirement after taxes are paid.

Total taxable account
Total value of your savings, at retirement, if the after-tax contribution amount is deposited into a taxable account. This value, which we call your "Taxable Account Deposit" is calculated by assuming you could save an amount equal to the after-tax cost of contributing to a traditional IRA. Your "Taxable Account Deposit" is equal to your Traditional IRA contribution minus any tax savings. For example, assume you have a 30% combined state and federal tax rate. If you contribute $2,000 to a traditional IRA and qualify for the full $2000 tax deduction, the value of your tax deduction is $2,000 X 30% or $600. The after-tax cost of contributing to your traditional IRA would then be $2,000 minus $600 or $1,400. If you do not qualify for tax deductible traditional IRA contributions, your "Taxable Account Deposit" will be the same as your traditional IRA contribution.

In addition, all earnings in your taxable account are assumed to be taxable in the year they are earned.




©1999-2013 KJE Computer Solutions, LLC
Financial Calculators at www.javacalc.com
(612) 331-2291
1730 New Brighton Blvd. PMB #111
Minneapolis, MN 55413