IRA Spend It or Save It Calculator
Spending your IRA before you retire can be a costly decision. See how taking out your IRA early could cost you thousands of dollars both in taxes and lost earnings.
How the ira spend it or save it calculator works
It subtracts income tax and any early-withdrawal penalty from your IRA balance to show the after-tax cash today, and compares it with the amount the balance could grow to by retirement if left invested.
Worked example: with ira balance of $25,000, your current age of 35 and marginal tax rate of 24.00%, the ira spend it or save it calculator shows value at retirement if you save it of $190,306.
- Cash if you spend it now
- $16,500
- Taxes owed
- $6,000
- Early-withdrawal penalty
- $2,500
- Value if kept to retirement
- $190,306
The formula
Cash now = balance − tax − (under 59½ ? 10% penalty : 0). If saved = balance × (1 + return)^(years to retirement).
Results are estimates for educational purposes and are not financial advice. Confirm exact figures with your lender, plan administrator or advisor.
Questions about the ira spend it or save it calculator
What does it cost to tap my IRA early?
Income tax on the withdrawal plus, generally, a 10% penalty if you are under 59½ — and the lost future growth, which is usually the largest cost of all.
Are there penalty-free exceptions?
Yes — for first-home purchases (up to $10,000), qualified education, large medical bills and a few others. Tax still applies, but the 10% penalty may be waived.
Is a Roth IRA different?
You can withdraw your Roth contributions (not earnings) anytime tax- and penalty-free. Earnings withdrawn early may face tax and penalty unless an exception applies.
Is the IRA Spend It or Save It Calculator free to use?
Yes. Every calculator on FinCalculators is completely free, with no sign-up, login or paywall. You can run as many scenarios as you like.