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Retirement Annuity Tax Comparison Scenario

Compare beginning-of-year contribution and withdrawal scenarios with entered contribution and retirement tax fractions.

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Calculator inputs

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How to use this calculator

  1. Enter the known values in the units shown. Results update as you type.
  2. Where results are editable, change one to solve backwards. Lock a value to hold it fixed.
  3. Use the worked example to check the method. Reset restores the starting fields.

Use the result with context

Results are estimates for planning and education. Confirm rates, taxes, fees, and legal requirements with the relevant institution or a qualified professional before making a financial decision.

Formula and method

A contribution of 1000 for one year at 10% return grows to 1100. A 20% contribution tax leaves 880 in the after-tax branch; one-year beginning withdrawals are 1100 before retirement tax and 880 after contribution tax.

Balance = contribution × [(1+r)^years − 1]/r × (1+r); beginning-year withdrawal is the annuity-due payment.

Worked example

Enter these known values and leave the other values blank.

Current age
59 years
Retirement age
60 years
Years of withdrawals
1 years
Tax bracket during contribution
20 %
Tax bracket at retirement
10 %
Annual contribution
1000 USD
Annual return rate
10 %
Contribution years
1 years
Annual contribution after tax (Roth IRA)
800 USD
IRA balance
1100 USD
IRA annual withdrawal
1100 USD
Annual withdrawal after tax
110 USD
Annual take home
990 USD
Roth IRA balance
880 USD
Annual take home
880 USD

Assumptions and limitations

  • This compares mathematical tax-timing scenarios with equal pretax contribution budgets. It does not check IRA/Roth eligibility, contribution caps, deduction eligibility or statutory withdrawal rules.
  • Contributions and withdrawals occur at the beginning of each year, and use a constant positive return. Zero return needs a separate limit outside the captured formula. The retained source requires age from 1 to below 70 and positive contribution-tax fractions; these are model restrictions, not statutory age or tax rules.
  • Enter all monetary amounts in a single currency. Retained currency conversion factors are a captured static snapshot, not live exchange rates.
  • Clear a known field before solving for it. Locks retain chosen inputs; inconsistent locked values need correction. Reset restores the captured defaults.

Common questions

What does the worked example show?

A contribution of 1000 for one year at 10% return grows to 1100. A 20% contribution tax leaves 880 in the after-tax branch; one-year beginning withdrawals are 1100 before retirement tax and 880 after contribution tax.

What assumptions limit this calculation?

This compares mathematical tax-timing scenarios with equal pretax contribution budgets. It does not check IRA/Roth eligibility, contribution caps, deduction eligibility or statutory withdrawal rules.

References

Use the documented finite scenario domain. return rate must be positive. years of withdrawals must be positive. Retirement age must exceed current age. Use a percentage between zero and 100. Use a percentage between zero and 100. annual contribution cannot be negative.

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