Roth IRA Calculator - Tax-Free Growth Estimator

Roth IRA Calculator

Estimate your tax-free retirement savings and compare them to a taxable investment account.

Tax-Free Growth Planner

Profile & Savings
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2024 Limit: $7,000 ($8,000 if age 50+).
Comparison Assumptions
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To compare with a taxable account.
Employer Match? A 401(k) might be better if your company matches contributions. Check the 401(k) Calculator.
Total Roth Balance at Age 65
$0
Tax Savings: $0
Contributions
$0
Total Growth
$0
Taxable Acct. Value
$0
Roth IRA withdrawals are tax-free in retirement. Taxable accounts are subject to capital gains taxes.

What is a Roth IRA?

A Roth IRA is an individual retirement account that offers tax-free growth and tax-free withdrawals in retirement. Unlike a traditional IRA or 401(k), you contribute with money that has already been taxed (after-tax dollars).

This Roth IRA Calculator helps you project your investment growth and demonstrates the powerful advantage of tax-free compounding compared to a standard taxable investment account.

Key Benefits of a Roth IRA

  • Tax-Free Withdrawals: Since you paid taxes upfront, you owe $0 to the IRS when you withdraw your money in retirement (after age 59½ and holding the account for 5 years).
  • No RMDs: Unlike Traditional IRAs, Roth IRAs do not have Required Minimum Distributions (RMDs) during the owner's lifetime. You can let the money grow forever if you don't need it.
  • Flexibility: You can withdraw your contributions (but not earnings) at any time, for any reason, without tax or penalty.

Contribution Limits (2024)

The IRS sets annual limits on how much you can contribute.

  • Under Age 50: $7,000 per year.
  • Age 50 and Over: $8,000 per year (includes $1,000 "catch-up" contribution).
Note: There are income limits. If you earn too much (e.g., >$161k for singles in 2024), you may not be eligible to contribute directly to a Roth IRA.

Roth IRA vs. Taxable Account

In a standard brokerage account, you have to pay taxes on dividends and capital gains.
Example: If your account grows by $100,000 and your tax rate is 22%, you might owe ~$22,000 in taxes upon withdrawal in a taxable account. In a Roth IRA, you keep that $22,000. That is the "Tax Savings" shown in this calculator.

Disclaimer & Legal Notice

Estimations Only: This calculator assumes a constant rate of return and constant tax rate. Investment returns vary year to year. The "Tax Savings" calculation assumes the taxable account gains would be taxed at the entered rate at the end of the period (a simplified view of capital gains/income tax drag).

Rules Subject to Change: Contribution limits and tax laws are subject to change by Congress.

Not Financial Advice: This tool is for educational purposes. Consult a CPA or financial advisor to determine eligibility and suitability for your specific situation.