See how much a Traditional IRA contribution saves on taxes.
Max $7,000 ($8,000 if 50+)
Deductible: $7,000 at 22.0%
Net cost after tax savings
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Tax Savings = Deductible Contribution × Marginal Tax Rate
Deductibility phases out for 401k participants above income limits.
A $7,000 IRA contribution (2024 limit) at 22% tax bracket = $1,540 in federal tax savings. At 24%: $1,680. Your tax bill drops immediately.
Full deduction if you (and spouse) don't have workplace retirement plan. Partial deduction with workplace plan: single filers phase out at $77K-$87K income (2024).
Traditional IRA: save taxes now, pay in retirement. Roth IRA: pay taxes now, tax-free in retirement. Traditional better if you expect lower tax rate in retirement.
Yes — you can contribute to both a 401k and IRA. Combined IRA limit is $7,000 ($8,000 if 50+). 401k limit is $23,000 ($30,500 if 50+) separately.
You can contribute for the previous tax year until April 15. Contribute for 2024 up until April 15, 2025. Don't wait — contribute early to maximize growth.
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Calculations are for educational purposes only. Consult a qualified financial advisor for personalized advice.