Roth IRA vs Traditional IRA Calculator
Compare tax-free Roth growth with Traditional IRA tax deductions
A Roth IRA is a retirement account funded with after-tax dollars, meaning qualified withdrawals in retirement are completely tax-free. This calculator projects your Roth IRA growth and shows the value of tax-free compounding over time.
Formula:
Future Value = Annual Contribution × ((1+r)^n - 1) / rContributions grow tax-free, and qualified withdrawals after age 59½ are tax-free.
- 1
Enter your current Roth IRA balance
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Input your planned annual contribution
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Set your current age and retirement age
- 4
Choose expected rate of return
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View projected tax-free retirement balance
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Compare to traditional IRA tax implications
- Tax-free growth and withdrawals in retirement
- No required minimum distributions during your lifetime
- Contributions can be withdrawn anytime tax and penalty-free
- Hedge against future tax rate increases
- Excellent for young investors in low tax brackets
- Planning annual Roth contributions
- Comparing Roth vs Traditional IRA
- Evaluating backdoor Roth strategy
- Projecting retirement income
- Estate planning (Roth passes tax-free)
- Tax diversification planning
- •Contribute early in the year to maximize tax-free growth
- •Backdoor Roth IRA works for high earners over income limits
- •Roth is often better if you're in a low tax bracket now
- •No RMDs means you can let it grow for heirs
Have questions about using this calculator? Check out our financial guides or contact us for help.
2024 limit: $7,000
Your marginal tax rate while contributing
Expected tax rate during withdrawals
Tax Strategy Insight
Traditional IRA may be better - save taxes now at higher rate
After-Tax Balance at 65
$1,267,913
Contributed
$237,500
Earnings
$1,030,413
Taxes Paid
$54,600
Roth IRA wins!
Based on your tax situation
+$278,941
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Frequently Asked Questions
What is the difference between Roth and Traditional IRA?
Roth IRA contributions are made with after-tax money, but withdrawals in retirement are tax-free. Traditional IRA contributions may be tax-deductible, but withdrawals are taxed as income. Roth is better if you expect higher taxes in retirement; Traditional is better if you're in a high tax bracket now.
What is the Roth IRA contribution limit?
For 2024, the contribution limit is $7,000 per year, or $8,000 if you're age 50 or older (catch-up contribution). These limits apply to the total of all your IRA contributions (Roth + Traditional combined).
What is the income limit for Roth IRA contributions?
For 2024, single filers can contribute the full amount if income is below $146,000. Contributions phase out between $146,000-$161,000. For married filing jointly, the phase-out is $230,000-$240,000. Above these limits, consider a Backdoor Roth IRA strategy.
What is a Backdoor Roth IRA?
A Backdoor Roth IRA is a strategy for high earners who exceed income limits. You contribute to a Traditional IRA (non-deductible) and then convert it to a Roth IRA. This is legal and commonly used, but consult a tax professional for proper execution.
When can I withdraw from my Roth IRA?
You can withdraw your contributions (not earnings) anytime tax and penalty-free. For tax-free earnings withdrawal, you must be 59½ or older AND have held the account for at least 5 years. Early earnings withdrawals may incur taxes and a 10% penalty.