FinanceCalcs
Roth IRA Calculator
Project your tax-free Roth IRA balance at retirement — and compare it side by side against a Traditional IRA to see which account type puts more money in your pocket after taxes.
Factors in annual contributions, investment growth, and your tax rates today and in retirement — with a year-by-year growth schedule.
Roth IRA Calculator
Total Contributed: $0 | Tax-Free Gains: $0
Roth IRA at 65: $0
- Roth Balance
- Total Contributions
"The best time to start a Roth IRA was yesterday. The second best time is today."
— Unknown
Roth IRA vs. Traditional IRA
Both Roth and Traditional IRAs are powerful retirement accounts, but they are taxed at opposite ends of the timeline. With a Roth IRA, you contribute after-tax dollars — and all future growth and qualified withdrawals are completely tax-free. With a Traditional IRA, contributions may be tax-deductible today, reducing your current taxable income, but you pay ordinary income tax on all withdrawals in retirement.
If you expect to be in a higher tax bracket in retirement than you are today, the Roth typically wins — you pay taxes now at the lower rate and enjoy tax-free growth forever. If you expect a lower tax bracket in retirement, the Traditional IRA's upfront deduction may come out ahead. When uncertain, younger savers with decades of compounding ahead often benefit most from the Roth's tax-free growth.
Roth IRAs also have no Required Minimum Distributions — you are never forced to withdraw — and contributions (not earnings) can be withdrawn at any time without penalty, giving the account unusual flexibility.
lightbulb Example Roth IRA Scenario
Suppose you are 28 years old, contribute $6,000/year to a Roth IRA, expect a 7% annual return, and plan to retire at 65. Over 37 years, your total contributions would be $222,000 — but the account would grow to approximately $1,080,000, all of it tax-free at withdrawal.
A Traditional IRA with the same contributions and return would also reach ~$1,080,000, but withdrawals in retirement would be taxed as ordinary income. At a 22% tax rate in retirement, the after-tax value would be roughly $842,000 — about $238,000 less than the Roth.
The comparison flips if your tax rate drops significantly in retirement. At a 12% retirement rate, the Traditional IRA's after-tax value climbs to ~$950,000 — still less than the Roth, but the gap narrows considerably.
Running both scenarios with your own numbers is the clearest way to see which account type wins for your situation.
Roth IRA Calculator FAQs
Who should choose a Roth IRA over a Traditional IRA?
The Roth generally favors younger savers, lower-income earners, and anyone who expects their tax rate to be higher in retirement than it is today. It also makes sense if you want flexibility — Roth contributions can be withdrawn any time without penalty, and there are no RMDs forcing withdrawals in retirement. For high earners near the income limit, a backdoor Roth conversion may still be available.
What are the 2024 Roth IRA contribution limits?
For 2024, you can contribute up to $7,000 per year ($8,000 if you are age 50 or older). This limit applies across all IRA accounts combined — Roth and Traditional together. Eligibility phases out for single filers with MAGI above $146,000 and married filers above $230,000. Above these thresholds, a backdoor Roth conversion strategy may be an alternative.
Can I withdraw from a Roth IRA before retirement?
Yes, with some important distinctions. Contributions (the money you put in) can be withdrawn at any time, at any age, without taxes or penalties — because you already paid tax on that money. Earnings are a different matter: withdrawing earnings before age 59½ or before the account has been open for at least 5 years typically triggers taxes and a 10% penalty, with limited exceptions.
What happens to a Roth IRA if I exceed the income limit?
If your income exceeds the phase-out threshold, you cannot contribute directly to a Roth IRA. However, there is no income limit on Roth conversions. A backdoor Roth involves making a non-deductible contribution to a Traditional IRA and then converting it to a Roth — a legal strategy widely used by higher earners to access the Roth's tax-free growth benefits.
IRA terminology
Tax-Free Growth
Roth IRA earnings — dividends, interest, and capital gains — are never subject to income tax, provided the account has been open at least 5 years and you are 59½ or older when you withdraw. This is the Roth's primary long-term advantage.
Contribution Limit
For 2024, the annual contribution limit is $7,000 ($8,000 if age 50 or older). This limit applies across all IRA accounts combined — you cannot contribute $7,000 to a Roth and another $7,000 to a Traditional IRA in the same year.
Income Phase-Out
Roth IRA direct contribution eligibility phases out for single filers with MAGI above $146,000 and married filers above $230,000 in 2024. Above the limit, a backdoor Roth conversion strategy may be used to achieve the same result.
Qualified Distribution
A tax-free and penalty-free withdrawal from a Roth IRA requires the account to have been open for at least 5 years and the account holder to be age 59½ or older. Contributions — not earnings — can be withdrawn at any time without restriction.
No RMDs
Unlike 401(k)s and Traditional IRAs, Roth IRAs have no Required Minimum Distributions. You are never forced to withdraw, allowing the account to compound indefinitely — and making it a useful estate planning tool for passing tax-free wealth to heirs.
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