Roth IRA Calculator

Calculate your Roth IRA growth potential, check income eligibility, and project completely tax-free retirement income. Start building your tax-free future today!

Your current age

Age you plan to retire

Current amount in your Roth IRA (enter 0 if starting fresh)

2024 limit: $7,000 ($8,000 if age 50+)

Expected yearly increase in contributions (e.g., with raises)

Average annual investment return (conservative: 6-7%, moderate: 7-9%)

Your tax filing status for income limit check

2024 limits: Single $146k-$161k, Married $230k-$240k for phase-out

Future Value = Starting Balance * (1 + r)^n + Sum of [Annual Contribution * (1 + r)^years remaining]\n\nWith contribution increases:\nYear N Contribution = Initial Contribution * (1 + increase rate)^(N-1)\n\nTax-Free Income = Final Balance * 4% Safe Withdrawal Rate\n\nEligibility:\n- Single: Phase-out $146k-$161k MAGI\n- Married: Phase-out $230k-$240k MAGI\n- Reduced contribution in phase-out range
Example: Age 30, retiring at 65, $10k starting balance\nContribution: $7,000/year, 8% annual return\n\nYear 1: $10,000 + $7,000 = $17,000 * 1.08 = $18,360\nYear 2: $18,360 + $7,000 = $25,360 * 1.08 = $27,389\n...\nYear 35: Total Value ≈ $1,035,000\n\nTax-Free Monthly Income (4% rule):\n$1,035,000 * 4% / 12 = $3,450/month\n\nCompletely tax-free!\n\nVs Traditional IRA (22% tax bracket):\nTraditional monthly: $3,450 * 78% = $2,691\nRoth advantage: $759/month tax savings

What is a Roth IRA and how is it different from a traditional IRA?

A Roth IRA is a retirement account where you contribute after-tax dollars, but all withdrawals in retirement are completely tax-free (including earnings). In contrast, traditional IRA contributions are tax-deductible now, but you pay taxes on withdrawals later. Roth is better if you expect to be in a higher tax bracket in retirement or want tax-free income.

What are the 2024 Roth IRA contribution limits?

For 2024, you can contribute up to $7,000 per year ($8,000 if age 50 or older with $1,000 catch-up contribution). However, these limits phase out at higher incomes: Single filers $146k-$161k MAGI, Married filing jointly $230k-$240k MAGI. Above these ranges, you cannot contribute directly (but can do a Backdoor Roth IRA).

Can I contribute to both a 401k and Roth IRA?

Yes! They have separate contribution limits. For 2024, you can contribute $23,000 to a 401k ($30,500 if 50+) AND $7,000 to a Roth IRA ($8,000 if 50+), as long as you meet the Roth IRA income requirements. This is a powerful wealth-building strategy combining tax-deferred (401k) and tax-free (Roth) growth.

What is a Backdoor Roth IRA?

If your income exceeds Roth IRA limits, you can still contribute indirectly: (1) Make a non-deductible contribution to a traditional IRA (no income limits), (2) Immediately convert it to a Roth IRA. This is called a "backdoor" Roth contribution. Be aware of the pro-rata rule if you have existing traditional IRA balances.

When can I withdraw from a Roth IRA without penalty?

Contributions can be withdrawn anytime tax and penalty-free (you already paid taxes). For earnings: must be age 59.5+ AND account open for 5+ years for completely tax and penalty-free withdrawal. Early withdrawal of earnings (before 59.5 or 5-year rule) incurs 10% penalty plus taxes, with some exceptions (first home, disability, etc.).

Should I max out my 401k or Roth IRA first?

General strategy: (1) Contribute to 401k up to employer match (free money), (2) Max out Roth IRA ($7,000), (3) Return to 401k and max it out ($23,000), (4) Consider taxable brokerage or HSA. This gives you both tax-deferred and tax-free income in retirement, providing flexibility.

What is the 5-year rule for Roth IRA?

There are actually two 5-year rules: (1) To withdraw earnings tax-free, the Roth must be open 5+ years AND you must be 59.5+. (2) For conversions from traditional to Roth IRA, each conversion has its own 5-year clock to avoid the 10% early withdrawal penalty. Start your Roth early to satisfy this rule!

Can I use a Roth IRA to buy a house?

Yes! You can withdraw contributions anytime for any reason. Additionally, first-time homebuyers can withdraw up to $10,000 of earnings penalty-free (but earnings are still taxed unless you meet the age 59.5 and 5-year rules). You must use the funds within 120 days for qualified home purchase.

What investments can I hold in a Roth IRA?

You can invest in stocks, bonds, ETFs, mutual funds, REITs, and many other securities. Most people use low-cost index funds (like S&P 500 or total market funds) for long-term growth. You cannot invest in life insurance, collectibles, or most precious metals (except certain gold/silver coins). Real estate is possible but complex.

Do I have to take required minimum distributions (RMDs) from a Roth IRA?

No! This is a huge advantage. Unlike traditional IRAs (which require RMDs starting at age 73), Roth IRAs have NO required minimum distributions during your lifetime. You can let it grow tax-free indefinitely, making it an excellent wealth transfer tool for heirs (though beneficiaries do have RMD requirements).