Roth vs Traditional IRA Calculator
Deciding between a traditional and Roth IRA can be a difficult decision. KeyBank’s Roth vs. Traditional IRA Calculator makes that decision easier. Compare how your earnings will grow with each and choose the best option for your retirement plan.
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Additional Functions
Click this menu to access additional calculator functions including:
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Age, income and retirement information: |
Current age
This current age of the account owner. The current age of the account owner must be 72 or less for this calculator. Although it is possible to make contributions to an IRA at any age when you have eligible income, this calculator does not take Required Minimum Distributions (RMD) into account, which begin at age 75 (or 70 1/2 if you were born before 7/1/1949, 72 if you were born 7/1/1949 to 12/31/1951, 73 if you were born 1/1/1951 to 1/1/1960) and is not designed for individuals that are required to make these distributions.
Age at retirement
Age you wish to retire. This calculator assumes that the year you retire, you do not make any contributions to your IRA. For example, if you retire at age 65, your last contribution occurs when you are actually 64.
Adjusted gross income
Your adjusted gross income from your tax return. This is used to determine whether or not your annual contributions might be tax-deductible.
Annual contribution
The amount you will contribute to an IRA each year. This calculator assumes that you make your contribution at the beginning of each year. For 2025, the maximum annual IRA contribution is $7,000 which is the same as 2024. 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 2025, but is adjusted for inflation in $100 increments starting in 2024. 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.
Roth IRA contributions are limited for higher incomes. If your income falls in a 'phase-out' range you are allowed only a prorated Roth IRA contribution. If your income exceeds the phase-out range, you do not qualify for any Roth IRA contribution. The table 'Roth IRA 2025 Contribution Phaseout' summarizes the income 'phase-out' ranges for Roth IRAs.
| Tax Filing Status | Income Phase-Out Range |
|---|---|
| Married filing jointly or head of household | $236,000 to $246,000 |
| Single | $150,000 - $165,000 |
| Married filing separately | $0 - $10,000 |
For the purposes of this calculator, the tool assumes you are not "Married filing separately" and contributing to a Roth IRA.
Starting in 2010 high income individuals have the option to make non-deductible traditional IRA contributions and then immediately convert them to a Roth IRA. This can effectively eliminate the income phase-out for Roth IRA contributions. This option for Roth IRA contributions may or may not be available in later years depending on future changes to the IRA law. This calculator assumes that you will not be taking advantage of this option.
Total contributions
The total amount contributed to your IRA.
Maximize contributions
Check this box if you plan to contribute the maximum amount allowed to your account each year. This includes the additional catch-up contribution available when you are age 50 or over.
Investment return, taxes, employment and marital status: |
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 Standard & Poor's 500® (S&P 500®) for the 10 years ending December 31st 2024, had an annual compounded rate of return of 14.9%, including reinvestment of dividends. From January 1, 1970 to December 31st 2024, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 11.2% (source: www.spglobal.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 financial institution pay 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 investment funds and/or investment companies may charge.
Current tax rate
The current marginal income 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.
Married
Check the box if you are married. This is used to determine whether or not your annual contributions are tax-deductible.
For the purposes of this calculator, the tool assumes you are not "Married filing separately".
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 whether or not your annual contributions might be tax-deductible.
Totals At Retirement |
After-Tax Comparison |
Definitions
Current age
This current age of the account owner. The current age of the account owner must be 72 or less for this calculator. Although it is possible to make contributions to an IRA at any age when you have eligible income, this calculator does not take Required Minimum Distributions (RMD) into account, which begin at age 75 (or 70 1/2 if you were born before 7/1/1949, 72 if you were born 7/1/1949 to 12/31/1951, 73 if you were born 1/1/1951 to 1/1/1960) and is not designed for individuals that are required to make these distributions.
Annual contribution
The amount you will contribute to an IRA each year. This calculator assumes that you make your contribution at the beginning of each year. For 2025, the maximum annual IRA contribution is $7,000 which is the same as 2024. 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 2025, but is adjusted for inflation in $100 increments starting in 2024. 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.
Roth IRA contributions are limited for higher incomes. If your income falls in a 'phase-out' range you are allowed only a prorated Roth IRA contribution. If your income exceeds the phase-out range, you do not qualify for any Roth IRA contribution. The table 'Roth IRA 2025 Contribution Phaseout' summarizes the income 'phase-out' ranges for Roth IRAs.
| Tax Filing Status | Income Phase-Out Range |
|---|---|
| Married filing jointly or head of household | $236,000 to $246,000 |
| Single | $150,000 - $165,000 |
| Married filing separately | $0 - $10,000 |
For the purposes of this calculator, the tool assumes you are not "Married filing separately" and contributing to a Roth IRA.
Starting in 2010 high income individuals have the option to make non-deductible traditional IRA contributions and then immediately convert them to a Roth IRA. This can effectively eliminate the income phase-out for Roth IRA contributions. This option for Roth IRA contributions may or may not be available in later years depending on future changes to the IRA law. This calculator assumes that you will not be taking advantage of this option.
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 Standard & Poor's 500® (S&P 500®) for the 10 years ending December 31st 2024, had an annual compounded rate of return of 14.9%, including reinvestment of dividends. From January 1, 1970 to December 31st 2024, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 11.2% (source: www.spglobal.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 financial institution pay 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 investment funds and/or investment companies may charge.
Age at retirement
Age you wish to retire. This calculator assumes that the year you retire, you do not make any contributions to your IRA. For example, if you retire at age 65, your last contribution occurs when you are actually 64.
Current tax rate
The current marginal income 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
Your adjusted gross income from your tax return. This is used to determine whether or not your annual contributions might be tax-deductible.
Married
Check the box if you are married. This is used to determine whether or not your annual contributions are tax-deductible.
For the purposes of this calculator, the tool assumes you are not "Married filing separately".
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 whether or not your annual contributions might be tax-deductible.
Maximize contributions
Check this box if you plan to contribute the maximum amount allowed to your account each year. This includes the additional catch-up contribution available when you are age 50 or over.
Total non-deductible contributions
The total of your traditional IRA contributions that were made without a tax deduction. Traditional IRA contributions are often tax-deductible. However, if you have an employer-sponsored retirement plan at work, such as a 401(k), your tax deduction is limited based on your income. This calculator automatically determines if your tax deduction is limited by your income.
| Tax Filing Status | Income Phase-Out Range |
|---|---|
| Married filing jointly | $126,000 - $146,000 |
| Single, Head of Household or Married Filing Separately (and have not lived with spouse for last year)* | $79,000 - $89,000 |
| Married filing separately* | $0 - $10,000 |
| Married filing jointly (spouse has employer plan, IRA owner does not)** | $236,000 - $246,000 |
*For the purposes of this calculator, the tool assumes you are not "Married filing separately".
**This calculator does not account for the special situation where your spouse has an employer-sponsored retirement plan but you do not.
Total contributions
The total amount contributed to your IRA.
IRA total after taxes
For the Roth IRA, this is the total value of the account. For the traditional IRA, this is the sum of two parts: 1) The value of the account after you pay income taxes on all earnings and tax-deductible contributions and 2) additional earnings from the re-invested tax savings.
Please note that for distributions to include earnings that are tax-free the Roth IRA must be opened for 5 tax years. Eligible tax-free distributions include those taken for death or disability, after age 59-1/2, or for a first-time home purchase.
Please consult with a tax professional regarding IRA eligibility, tax deductions and your specific situation.
Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues. Calculators do not include the fees and restrictions that certain products may have. Please visit the applicable banking product pages on key.com for specific terms and conditions, or visit any KeyBank branch to discuss what products may be appropriate for you.
Investment products are:
NOT FDIC INSURED • NOT BANK GUARANTEED • MAY LOSE VALUE • NOT A DEPOSIT • NOT INSURED BY ANY FEDERAL OR STATE GOVERNMENT AGENCY
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