Roth IRA Calculator
Project the tax-free growth of your Roth IRA contributions. See how much your retirement savings could grow with compound interest, annual contributions, and decades of tax-free earnings.
How a Roth IRA Works
A Roth IRA is a retirement account where you contribute after-tax dollars, meaning you pay taxes now but all future growth and withdrawals are completely tax-free. For 2024, the maximum annual contribution is $7,000 ($8,000 if you are 50 or older). Unlike traditional IRAs, Roth IRAs have no required minimum distributions (RMDs), allowing your money to grow tax-free for as long as you want. You can withdraw your contributions at any time without penalty, though earnings should remain until age 59½ to avoid taxes and penalties. The Roth IRA is widely considered one of the most powerful retirement savings vehicles available.
Roth IRA vs Traditional IRA
The key difference is when you pay taxes. With a traditional IRA, contributions may be tax-deductible now, but withdrawals in retirement are taxed as ordinary income. With a Roth IRA, you pay taxes on contributions now but enjoy completely tax-free withdrawals in retirement. If you expect your tax rate to be higher in retirement (common for younger workers), the Roth IRA typically wins. The tax-free growth is especially powerful over long time horizons — decades of compound growth without any tax drag. This calculator shows the tax savings by comparing your Roth balance to what a taxable account would yield.
Maximizing Your Roth IRA Growth
Contribute the maximum amount every year — even missing one year means losing that contribution space forever (unlike 401k, Roth IRA limits cannot be made up later). Invest early in the year rather than waiting until the April deadline to get an extra year of growth. Choose low-cost index funds to minimize fees that erode returns. If your income exceeds Roth IRA limits ($161,000 single, $240,000 married in 2024), consider a backdoor Roth conversion. Starting at age 25 and contributing $7,000 annually at 8% returns yields over $1.5 million by age 65 — all tax-free.
Roth IRA Withdrawal Rules
You can withdraw your contributions (not earnings) at any time, tax and penalty-free. For tax-free earnings withdrawals, you must be at least 59½ and the account must have been open for at least 5 years. Exceptions include first-time home purchases (up to $10,000 in earnings), disability, and certain other circumstances. There are no required minimum distributions at any age, making the Roth IRA an excellent estate planning tool. Your beneficiaries can inherit the account and continue tax-free growth, though distribution rules apply.
Frequently Asked Questions
What is the Roth IRA contribution limit?
For 2024, the limit is $7,000 per year ($8,000 if age 50 or older). These limits are adjusted periodically for inflation.
Who is eligible for a Roth IRA?
Anyone with earned income below the income limits: $161,000 (single) or $240,000 (married filing jointly) for full contributions in 2024. Reduced contributions are allowed up to $176,000/$240,000.
When can I withdraw from my Roth IRA?
Contributions can be withdrawn anytime tax and penalty-free. Earnings can be withdrawn tax-free after age 59½ if the account has been open at least 5 years.
Is a Roth IRA better than a 401k?
They serve different purposes. A 401k offers higher contribution limits ($23,000 in 2024) and possible employer match. A Roth IRA offers tax-free growth, no RMDs, and more investment choices. Ideally, use both.
What is a backdoor Roth IRA?
A strategy for high-income earners who exceed Roth IRA income limits. You contribute to a traditional IRA (non-deductible) then convert it to a Roth IRA. This is legal and commonly used.
How much can a Roth IRA grow to?
Contributing $7,000 annually from age 25 to 65 at 8% average returns yields approximately $1.55 million, all tax-free. Starting at 30 yields about $1.03 million.