IRA Spend It Or Save It Calculator
Spending your IRA before you retire can be a costly decision. Depending on your age and tax bracket, spending your IRA can cost you thousands of dollars between taxes, penalties, and lost earnings. This calculator helps illustrate the difference between spending your IRA now, and saving it for retirement.
Current Age
Your current age.
Age Of Retirement
Age you wish to retire. We calculate the ending balance at retirement for each of your rollover options.
Federal Income Tax Rate
Consult the table below to determine your federal tax bracket. If you are unsure, the calculator will choose 25%. Please note that state taxes are entered in a separate entry field.
| 10% |
$0 - 17,400 |
$0 - 8,700 |
$0 - $12,400 |
$0 - 8,700 |
| 15% |
$17,400 - 70,700 |
$8,700 - 35,350 |
$12,400 - 47,350 |
$8,700 - 35,350 |
| 25% |
$70,700 - 142,700 |
$35,350 - 85,650 |
$47,350 - 122,300 |
$35,350 - 71,350 |
| 28% |
$142,700- 217,450 |
$85,650 - 178,650 |
$122,300 - 198,050 |
$71,350 - 108,725150 |
| 33% |
$217,450 - 388,350 |
$178,650 - 388,350 |
$198,050 - 388,350 |
$108,725 - 194,175 |
| 35% |
over $388,350 |
over $388,350 |
over $388,350 |
over $194,175 |
Source: Revenue Procedure 2011-52, IRS
State Income Tax Rate
The current state marginal tax rate you expect to pay on any additional income (or taxable distributions).
Current IRA Balance
The starting balance or current amount you have invested or saved in your IRA.
Annual 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 type of investments you select. The S&P 500 for the ten years ending on December 31st, 2011 had an annual compounded rate of return of 2.92%, including reinvestment of dividends. From January 1970 through the end of 2011, the average annual compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 10.01% (source: www.standardandpoors.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 bank may pay as little as 0.25% or 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 funds and/or investment companies may charge.