Retirement Accounts
Roth IRA Calculator
Project your Roth IRA's tax-free growth and see how much monthly retirement income it can generate — with the IRS contribution limit enforced automatically.
How the Roth IRA calculator works
A Roth IRA grows through compound interest on your contributions. Each year, your existing balance earns returns, and your new contribution is added to the growing balance. Because Roth IRA contributions are made with after-tax dollars, all growth and qualified withdrawals in retirement are completely tax-free — the IRS never taxes the compounded gains.
The calculator compounds annually: each year's balance = (prior balance + annual contribution) × (1 + return rate). Contributions are capped at the applicable IRS limit — $7,000 per year under age 50, $8,000 at 50 or older. At retirement, the 4% withdrawal rule estimates sustainable monthly income from your accumulated balance.
The tax-free advantage
The compounding math favors Roth IRAs more than most people expect. Consider maxing your Roth IRA at $7,000/year from age 25 to 65 — 40 years of contributions. Your total contributions would be $280,000. At a 7% annual return, your balance at 65 would be approximately $1.5 million. The $1.22 million in growth is entirely tax-free. In a Traditional IRA with the same numbers, you'd owe ordinary income tax on every dollar withdrawn.
Roth IRA income limits (2024)
Roth IRA contributions phase out at higher incomes:
- Single/Head of Household: Full contribution below $146,000 MAGI; phases out $146,000–$161,000; no direct Roth contribution above $161,000
- Married Filing Jointly: Full contribution below $230,000 MAGI; phases out $230,000–$240,000; no direct Roth above $240,000
- Married Filing Separately: Phases out $0–$10,000
High earners above these thresholds can use the backdoor Roth strategy (Traditional IRA → Roth conversion).
Roth vs Traditional: which is better?
The core question is whether your tax rate will be higher now or in retirement:
- Roth wins if you expect to be in a higher tax bracket in retirement, you're young and early in your career, you want flexibility (no Required Minimum Distributions), or you want to pass tax-free assets to heirs
- Traditional wins if you're in a high bracket now and expect to be in a lower one in retirement, or you need the upfront tax deduction to afford contributions at all
- Both is often optimal — holding pre-tax (Traditional/401k) and after-tax (Roth) assets gives you flexibility in retirement to manage taxable income, control Medicare premiums, and optimize Social Security taxation
Key concepts
- Qualified distribution
- A Roth IRA distribution is "qualified" (and thus 100% tax and penalty-free) if the account has been open at least 5 years AND you are at least 59½, disabled, or deceased. Non-qualified distributions of earnings may trigger a 10% penalty.
- Required Minimum Distributions (RMDs)
- Traditional IRAs and 401(k)s require you to start taking distributions at age 73 (SECURE Act 2.0). Roth IRAs have NO RMDs during the owner's lifetime — you can let the money compound indefinitely, making them excellent estate planning tools.
- Catch-up contributions (age 50+)
- Starting in the year you turn 50, you can contribute an extra $1,000/year to your IRA (Roth or Traditional), bringing the total to $8,000 in 2024. The calculator automatically applies the $8,000 limit when your age is 50 or over.
Frequently asked questions
What is the 2024 Roth IRA contribution limit?
$7,000 per year if under 50; $8,000 per year at 50 or older. These limits apply to your combined Traditional + Roth IRA contributions — you can't contribute $7,000 to a Roth and $7,000 to a Traditional IRA in the same year. Limits are indexed for inflation and tend to increase every few years.
Can I have both a Roth IRA and a 401(k)?
Yes — you can contribute to both in the same year, as long as you meet the income requirements for each. Maxing both is a powerful wealth-building strategy: $7,000 Roth IRA + $23,500 401(k) = $30,500 in tax-advantaged retirement savings per year (2024 limits, under 50).
What happens to my Roth IRA if I leave it to my heirs?
Heirs who inherit a Roth IRA must withdraw all funds within 10 years of the original owner's death (SECURE Act rules). However, withdrawals remain tax-free as long as the account is at least 5 years old. A well-funded Roth IRA is one of the most tax-efficient assets you can leave to beneficiaries.
Can I open a Roth IRA at any age?
Yes, as long as you have earned income (wages, self-employment) and are within the income limits. Even a teenager with a summer job can contribute — up to the amount they earned that year (capped at $7,000). Starting early is one of the most powerful financial moves available due to the length of the compounding runway.
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Disclaimer: This calculator is for educational purposes only. Roth IRA eligibility depends on your modified adjusted gross income (MAGI) and tax filing status. Contribution limits and income thresholds are subject to change. Consult a qualified financial or tax advisor before making retirement account decisions.