 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 2005, the maximum annual IRA contribution is $4,000 per individual. It is important to note that this is the maximum total contributed to all of your IRA accounts. This maximum will increase to $5,000 by 2008. The table below summarizes IRA annual contribution limits.
Year  IRA contribution limit 
20022004  $3,000 
20052007 
$4,000 
2008 and after*  $5,000  *Beginning in 2009, the contribution limit will adjust annually for inflation in $500 increments
If you are 50 or older you can make additional "catchup" contributions of $500 more than the normal limits in 2002 through 2005. Starting in 2006, the "catchup" amount will increase to $1,000. In order to qualify for the "catchup" 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 dependant on the type of investments you select. From January 1970 to December 2004, the average compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 11.5% per year. During this period, the highest 12month return was 64%, and the lowest was 39%. Savings accounts at a bank pay as little as 1% or less. It is important to remember that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for longterm investments. This includes the potential loss of principal on your investment.
 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 nondeductible contributions, directly below.
 Total nondeductible contributions
 The total of your Traditional IRA contributions that were deposited without a tax deduction. Traditional IRA contributions are normally taxdeductible. However, if you have an employer sponsored retirement plan, such as a 401(k), your tax deduction may be limited.
In 2005, for single tax filers with an employer sponsored retirement plan, an IRA contribution is fully taxdeductible if your income is below $50,000. It is then prorated between $50,000 and $60,000. If your income is over $60,000 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 70,000 and $80,000. The phaseout ranges are scheduled to increase over the next few years. The table below summarizes the deduction phaseout for 2003  2007.
Traditional IRA Deduction Income PhaseOut Ranges 
Year  Single Taxpayers  Married Taxpayers Filing Jointly 
2003  $40,000$50,000  $60,000$70,000 
2004  $45,000$55,000  $65,000$75,000 
2005  $50,000$60,000  $70,000$80,000 
2006  $50,000$60,000  $75,000$85,000 
2007  $50,000$60,000  $80,000$100,000 
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 phaseouts are applied. First, if your spouse has an employer sponsored retirement plan but you do not, your tax deduction is phased out from $150,000 to $160,000. Second, if you are married filing separately and have an employer sponsored retirement plan, the income phaseout 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" then 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 $2000 to a Traditional IRA and qualify for the full $2000 tax deduction, the value of your tax deduction is $2000 X 30% or $600. The after tax cost of contributing to your Traditional IRA would then be $2000 minus $600 or $1400. 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.
