Ira Contribution Calculator

Guide to Using the IRA Contribution Calculator

This guide will help you navigate the IRA Contribution Calculator and effectively calculate your retirement savings based on your inputs. Follow these step-by-step instructions to use the calculator.

Step 1: Gather Your Information

Before using the calculator, ensure you have the necessary information ready. You will need your age, annual income, IRA type (Traditional or Roth), tax filing status, current IRA balance, expected monthly contribution, expected annual return rate, and planned retirement age.

Step 2: Input Your Age

Enter your current age in the field labeled “Your Current Age”. This field requires a number between 18 and 120.

Step 3: Enter Your Annual Income

Provide your annual income in the “Annual Income ($)” field. Ensure the amount is not less than zero.

Step 4: Select Your IRA Type

Choose your IRA type between “Traditional IRA” and “Roth IRA” from the dropdown labeled “IRA Type”.

Step 5: Choose Your Tax Filing Status

Select your tax filing status from the options: “Single”, “Married Filing Jointly”, or “Married Filing Separately” under “Tax Filing Status”.

Step 6: Enter Current IRA Balance

Input your current IRA balance in the field “Current IRA Balance ($)”. The balance must be zero or more.

Step 7: Specify Monthly Contribution

Enter the amount you intend to contribute monthly in the “Monthly Contribution ($)” field. This amount should be a positive number.

Step 8: Define Expected Annual Return

In the field labeled “Expected Annual Return (%)”, enter the percentage figure representing your expected annual return rate. It should be between 0 and 30%.

Step 9: Set Your Planned Retirement Age

Enter your planned retirement age in the “Planned Retirement Age” field. The allowed range is between 50 and 75 years.

Step 10: Review Your Calculations

Once all the input fields are filled out, the calculator will provide various results:

• Annual Contribution: The total annual contribution calculated as monthly contribution multiplied by 12.
• Maximum Allowed Contribution: The maximum contribution eligible per year, determined by your age.
• Years Until Retirement: The number of years remaining until your retirement age.
• Projected Balance at Retirement: The forecasted balance at retirement considering contributions and expected return rates.
• Total Contributions Until Retirement: Your total contributions made from now until retirement.
• Total Investment Earnings: The total earnings from your investments by retirement after deducting contributions and initial balance.

Each result will be formatted for clarity, with currency values presented in USD and relevant rounding applied.

Step 11: Interpret the Results

Evaluate the calculator’s results to understand your retirement savings trajectory. Utilize this information to make informed decisions about your IRA contributions and investment strategy to achieve your retirement goals.