Can $6000 IRA Contributions Really Add Up?


A wise person once said that humans tend to over-estimate what they can accomplish in the short-term and under-estimate what they can accomplish in the long-term. This holds very true for IRA contributions.

IRAs offer a number of benefits:

  • Regular savings
  • Potential tax-deductible contributions (depending on income levels and other retirement plan participation)
  • Tax-deferred compounding
  • Potential tax-free distributions (in the case of Roth IRAs)

It can be easy to put off or fail to make contributions to an IRA. Retirement may seem like a long way off and $6,000 may not sound like a lot of money to save. But look at how these contributions can accumulate.


Total Contributions

IRA Value at 6% earnings

IRA value at 8% earnings



















Taxes Due at 28%
- $82,418

- $139,916

Net After Tax (assumes non-deductible contributions were made)


No one can accurately predict what level of earnings you may earn on your investments. It may be difficult to foresee what the future tax laws will be. However, using IRAs as part of your retirement planning strategy can help you have the type of financially secure retirement you desire.


Only deposit products are FDIC insured.

The information provided is not intended to be legal, tax, or financial advice or recommendations for any specific individual, business, or circumstance. TowneBank cannot guarantee that it is accurate, up to date, or appropriate for your situation. Financial calculators are provided for illustrative purposes only. You are encouraged to consult with a qualified attorney or financial advisor to understand how the law applies to your particular circumstances or for financial information specific to your personal or business situation.

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