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Non-Deductible IRA vs. Taxable Account

Assumptions

Marginal Tax Rate at Withdrawal

28%

This spreadsheet compares a non-deductible IRA with a taxable account.

Capital Gains Tax Rate at Withdrawal

20%

Cells under "Assumptions" in blue are inputs. Feel free to change to your own situation.

Tax Rate on Distributions

28%

Other cells are calculated. For more info, see

Investment Return

8.0%

Distributions in Taxable Account

2.0%

A Non-Deductible IRA Is Worth It For Me

Number of Years Until Withdrawal

Calculated Fields

Summary

Return in Taxable after tax on distributions

7.4%

Advantage of Non-Deductible IRA Over Taxable

1.9%

Investment

100

If this number is positive, a non-deductible IRA is better.

If this number is negative, a taxable account is better.

Non-Deductible IRA

Value at withdrawal, before tax

1,006.27

Cost Basis

100.00

Taxable amount on withdrawal

906.27

Income tax on withdrawal

(253.75)

Value at withdrawal, after tax

752.51

Taxable Account

Value at Retirement, before capital gains tax

860.95

Cost Basis

247.28

Capital Gains

613.67

Capital gains tax

(122.73)

Value at withdrawal, after capital gains tax

738.22