Roth IRA Calculator
Project your Roth IRA balance and estimate tax-free retirement income.
📈 What is a Roth IRA?
A Roth IRA is an Individual Retirement Account that provides tax-free growth and tax-free withdrawals in retirement. Unlike a Traditional IRA where contributions may be tax-deductible but withdrawals are taxed, a Roth IRA is funded with after-tax dollars - you get no upfront tax deduction, but all qualified withdrawals in retirement, including all investment growth, are completely tax-free. This makes the Roth IRA one of the most powerful tax-advantaged vehicles available to American savers.
The Roth IRA is governed by specific income eligibility limits. For 2024, single filers earning up to $146,000 can contribute the full $7,000 ($8,000 for those 50+). The contribution limit phases out between $146,000 and $161,000 for single filers, and between $230,000 and $240,000 for married filing jointly. High earners above these limits can use the Backdoor Roth IRA strategy to still benefit from Roth's tax-free growth.
The key advantage of a Roth IRA over a Traditional IRA is the tax-free nature of withdrawals, which is most valuable when you expect to be in a higher tax bracket in retirement than you are now. Additionally, Roth IRAs have no Required Minimum Distributions (RMDs) during the owner's lifetime - unlike Traditional IRAs and 401ks, you are never forced to take withdrawals. This makes Roth IRAs excellent for legacy planning and for managing taxes in retirement by choosing when and how much to withdraw.
📐 Roth IRA Growth Formula
The Roth IRA balance formula is identical to the Traditional IRA formula - the growth mechanics are the same. The key difference is at withdrawal: the Roth balance is tax-free, while a Traditional IRA of equal size must be reduced by your retirement tax rate to arrive at the after-tax equivalent. The Roth Advantage shows how much more after-tax money you'll have from a Roth compared to a Traditional IRA at your expected retirement tax rate.
📖 How to Use This Calculator
Steps
💡 Example Calculations
Example 1 - Age 28, $7,000/Year at 7% to Age 65
Contribution = $7,000/year | Balance = $15,000 | Age 28→65 | Return = 7% | Retirement Tax = 22%
Example 2 - Starting at 22 with Zero Balance
Contribution = $7,000/year | Balance = $0 | Age 22→65 | Return = 8% | Tax Rate = 24%
❓ Frequently Asked Questions
🔗 Related Calculators
What is a Roth IRA and how is it different from a Traditional IRA?
A Roth IRA is an individual retirement account funded with after-tax dollars. Contributions are not tax-deductible, but all qualified withdrawals in retirement - including all earnings - are completely tax-free. Traditional IRA contributions may be tax-deductible, but withdrawals are taxed as ordinary income. The key decision: Traditional IRA is better if you expect a lower tax rate in retirement; Roth IRA is better if you expect a higher rate or want tax diversification.
What are the Roth IRA contribution limits for 2024?
The Roth IRA contribution limit for 2024 is $7,000 ($8,000 for those age 50+). However, contributions phase out at higher incomes: the ability to contribute to a Roth IRA phases out between $146,000 and $161,000 for single filers, and $230,000 and $240,000 for married filing jointly. Above these limits, you can use the Backdoor Roth IRA strategy (contribute to a non-deductible Traditional IRA, then convert to Roth).
When can I withdraw from a Roth IRA tax-free?
Roth IRA contributions (not earnings) can be withdrawn at any time, at any age, without taxes or penalties - since you already paid tax on them. Earnings (growth) can be withdrawn tax-free and penalty-free after age 59½, as long as the account has been open for at least 5 years (the 5-year rule). Early withdrawal of earnings (before 59½) is subject to a 10% penalty plus income tax, with some exceptions.
Should I choose a Roth IRA or Traditional IRA?
Key factors: If you're in a lower tax bracket now and expect to be in a higher bracket in retirement (e.g., early career), Roth IRA is generally better. If you're in a peak earning year and expect lower income in retirement, Traditional IRA's upfront deduction may be more valuable. Many advisors recommend having both for 'tax diversification' - some pre-tax and some after-tax savings to manage taxes in retirement flexibly.
Can I convert a Traditional IRA to a Roth IRA?
Yes. A Roth conversion allows you to move money from a Traditional IRA to a Roth IRA. You pay ordinary income tax on the converted amount in the year of conversion, but all future growth and withdrawals become tax-free. Conversions make sense when you're in a temporarily low tax year, want to reduce future RMDs, or want to leave tax-free money to heirs. There is no income limit for Roth conversions.
Who is eligible to contribute to a Roth IRA?
For 2025, Roth IRA contribution eligibility phases out at MAGI of $150,000-$165,000 for single filers and $236,000-$246,000 for married filing jointly. Above these limits, you cannot contribute directly. A backdoor Roth IRA (contribute to Traditional IRA then convert) is legal for high earners but has tax implications if you have existing pre-tax IRA balances.
Is a Roth IRA better than a 401(k)?
Both have advantages. Roth IRA: tax-free growth, no required minimum distributions, flexible withdrawal rules. 401(k): much higher contribution limits ($23,500 vs $7,000), possible employer match. Best strategy: contribute to 401(k) up to the employer match, then max the Roth IRA, then contribute more to 401(k) or a backdoor Roth if income allows.
What is a backdoor Roth IRA and how does it work?
A backdoor Roth IRA is a strategy for high earners who exceed the Roth IRA income limits. You make a non-deductible contribution to a Traditional IRA, then immediately convert it to a Roth IRA. This is legal but triggers the pro-rata rule if you have other pre-tax IRA balances, which can create an unexpected tax bill. Consult a tax advisor if you have existing Traditional IRA funds before using this strategy.