If you contribute to a traditional IRA and qualify for an IRA tax deduction , you can deduct your contribution from your 2018 adjusted gross income (AGI). So in the hypothetical case in the preceding chart, where you contribute $5,500 to an IRA and it balloons to $58,721 over a 35-year period, your investment earnings of more than $53,000 won't cost you a dime in taxes. In fact, based on the historic average inflation rate of about 3%, $519,534 will have about $208,000 in purchasing power, in terms of today's dollars.