IRA Calculator
Estimate how your IRA grows to retirement with monthly contributions and compound interest. Plan tax-advantaged savings.
Balance at retirement
₹1,44,74,029
Growth
₹1,13,74,029
Over 300 months
Your contributions
₹30,00,000
Growth share
482%
Of contributions contributed to date
IRAs are tax-advantaged retirement accounts in the US. Contributions may be tax-deductible; withdrawals are taxed as ordinary income. Returns are assumed to compound monthly and are not guaranteed.
Last updated: March 2026
How this calculator is verified
Checked by True Calculator automated test suite on
- Formula verified against a published worked example in the automated test suite
- Edge cases (zero, negative, boundary and unit-mismatch inputs) covered by unit tests
The full verification method is on our how we verify page. Found an error? Tell us and we will re-check it.
When to Use This Calculator
Use this calculator whenever you are weighing how much to put into a traditional IRA versus spending or saving elsewhere. Because it separates the final balance into your own contributions and the market growth, it makes the cost of delay visible — postponing contributions by five years removes five years of compounding from the money you invest. NRIs with US taxable income can contribute to an IRA, and this tool helps them plan that alongside their Indian savings, so the two pools together meet a retirement goal. It is also useful for annual check-ins: update the balance and contribution once a year and compare the projection with the previous one to confirm you are still on track. Remember the figures are pre-tax and pre-inflation — for a spending plan, discount the result with an inflation estimate.
How to Use This Calculator
- Step 1: Enter the number of years until retirement — the calculator compounds month by month across this horizon.
- Step 2: Add the current balance in your traditional IRA, including any amounts rolled over from earlier jobs.
- Step 3: Enter your monthly contribution. Use a sustainable number you can actually maintain rather than a peak bonus month.
- Step 4: Set the expected annual return and read the balance at retirement, growth, and the total of your contributions.
Worked Example
Rahul, 32, has ₹1,00,000 in a traditional IRA and adds ₹10,000 every month. At a 10% assumed return over 25 years, the balance reaches about ₹1.45 crore. His own ₹30 lakh of contributions generate roughly ₹1.14 crore of compounding growth. If he stopped contributing and relied on the balance alone, the same horizon would leave a far smaller corpus, which highlights how regular monthly contributions — not the starting amount — do most of the heavy lifting.
Tips and Common Mistakes
- •Tip 1: Time the market is impossible — time in the market is what matters, so start now even with small amounts.
- •Tip 2: If you change US employers, roll your old 401(k) into your IRA instead of cashing out to avoid tax and penalties.
- •Tip 3: Use the same rate for the IRA and your other projections so comparisons between plans stay apples-to-apples.
- ✗Mistake 1: Avoid contributing money you may need before 59½ — early withdrawals in the US carry a 10% penalty on top of tax.
- ✗Mistake 2: Avoid ignoring plan fees; a 1% annual fee difference compounds into a surprisingly large shortfall over 25 years.
Frequently Asked Questions
What is an IRA?
An IRA (Individual Retirement Account) is a US tax-advantaged account you open yourself, separate from an employer plan. In a traditional IRA, contributions are typically tax-deductible now and withdrawals are taxed later. India's NPS works on a similar tax-deferred principle.
Can NRIs open an IRA?
Yes — NRIs (non-resident Indians) can open and contribute to an IRA if they have US taxable income, such as US salary or business income. Contributions need to come from earned income. Once you return to India, you generally cannot keep contributing unless the US income continues.
How is a traditional IRA different from a Roth IRA?
A traditional IRA gives a tax deduction now and taxes withdrawals later; a Roth IRA takes after-tax money now and allows tax-free withdrawals later. If you expect a lower tax rate in retirement, a traditional IRA can be better; if higher, Roth wins.
What return assumptions should I use?
A balanced portfolio of US equities and bonds has historically returned roughly 6–8% per year over long periods. Use the rate you are actually comfortable with, and remember that compounding only works at the rate the account earns — it is not guaranteed.
Is there a penalty for early IRA withdrawals?
Yes — withdrawing before age 59½ in the US attracts a 10% penalty plus income tax, with limited exceptions such as first-time home purchase or education expenses. The calculator assumes you leave the money invested until retirement.
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