Traditional IRA Calculator

Definitions

Starting balance

The current balance of your Traditional IRA.

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. The maximum annual IRA contribution of $5,500 is unchanged for 2017 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 2017. 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.

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 occurs when you are actually age 64.

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.

Maximize contributions

Check this box to contribute the maximum 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 deposited without a tax deduction. Traditional IRA contributions are normally tax deductible. However, if you have an employer-sponsored retirement plan, such as a 401(k), your tax deduction may be limited.

Standard Deduction for 2017 Federal Income Tax

Tax Filing Status	2017 Traditional IRA Deduction Phase-Out Ranges
Married filing jointly	$99,000 - $119,000
Single or Head of Household	$62,000 - $72,000
Married filing separately	$0 - $10,000

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 phase-outs are applied. First, if your spouse has an employer-sponsored retirement plan but you do not, your tax deduction is phased out between incomes of $186,000 to $196,000. Second, if you are married filing separately and have an employer-sponsored retirement plan, your tax deduction is phased out between incomes of $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' 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 $2,000 to a traditional IRA and qualify for the full $2000 tax deduction, the value of your tax deduction is $2,000 X 30% or $600. The after-tax cost of contributing to your traditional IRA would then be $2,000 minus $600 or $1,400. 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.

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 31^st 2016, had an annual compounded rate of return of 6.6%, including reinvestment of dividends. From January 1, 1970 to December 31^st 2016, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.3% (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 financial institution 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 Separate Account investment funds and/or investment companies may charge.

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.

Married

Check the box if you are married. This is used to determine whether or not your annual contributions might be tax deductible.

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 non-deductible contributions.