VisualCalc’s Taxable vs. Tax-Deferred Calculator compares how much your investment will grow in a taxable vs. tax-deferred account. At any future withdrawal timeframe, the calculator shows the total amount of savings you will have accumulated in each type of account.
Almost all personal finance experts agree that one of the most important elements of smart retirement planning is to regularly contribute a portion of your income to a savings account, investment portfolio, or, better yet, a qualified retirement plan. Many of these experts advise withholding a set portion of each paycheck for your future retirement needs. The specific amount will vary based on individual needs and circumstances, but the targeted amount generally falls around 10-15% of each paycheck.
This has many advantages, including establishing a regular schedule for savings, making contributions more difficult to avoid or defer, and aligning your expenses with your post-contribution earnings.
One of the additional advantages to contributing a set portion of each paycheck to a qualified tax-deferred retirement plan, such as a Traditional IRA, is that your contributions are not taxed until they are withdrawn in retirement. This can offer a significant financial benefit.
This Income Withholding Calculator will help you determine how much Federal Income Tax you can save by contributing a portion of each paycheck to a qualified tax-deferred retirement plan.
