Ira Investment Calculator

How to Use the IRA Investment Calculator

This guide will walk you through the step-by-step process of using the IRA Investment Calculator to estimate your retirement savings and projected retirement income.

Step 1: Enter Your Personal Information

Start by providing your current age and the age you plan to retire. This information is crucial for calculating the number of years remaining until your retirement date.

• Current Age: Enter your current age in the provided field. Ensure it is between 18 and 70.
• Retirement Age: Provide the age at which you wish to retire. This should be between 59 and 75.

Step 2: Financial Details

Next, fill in your current IRA balance and the amount you plan to contribute annually to your IRA account. This will help calculate your total contributions by the time you reach retirement age.

• Current IRA Balance ($): Input your existing IRA balance. This figure must be greater than or equal to 0.
• Annual Contribution ($): Specify the amount you intend to contribute each year, capped at $7,000.

Step 3: Define Expected Returns

Indicate the annual return rate you expect on your investments. This rate is used to project future growth of your savings.

• Expected Annual Return (%): This should be a realistic percentage between 1% and 12%.

Step 4: Select Your IRA Type

Select whether you have a Traditional or Roth IRA. This choice will affect your overall tax implications.

• IRA Type: Choose either “Traditional IRA” or “Roth IRA” from the dropdown options.

Step 5: Review Your Results

Once all fields are filled out appropriately, review the results to understand the financial outlook for your retirement.

• Years Until Retirement: This is calculated as the difference between the retirement age and your current age.
• Total Contributions: Displays the total amount you expect to have contributed by the time you retire, including your current balance.
• Projected Retirement Balance: This figure shows your estimated retirement savings based on the expected annual return rate.
• Total Investment Earnings: This is the total amount earned through investments, calculated as the difference between your future balance and total contributions.
• Estimated Monthly Retirement Income: Provides an estimate of the monthly income you can expect during retirement, based on the projected savings and return rate.

By following these steps, you can effectively use the IRA Investment Calculator to plan for your financial future in retirement.