Roth IRA calculator

Roth IRA vs traditional IRA

A Roth IRA and a traditional IRA both let your investments grow without annual capital gains tax, but they handle the tax bill at opposite ends. With a Roth IRA, you contribute money that has already been taxed. In exchange, both your contributions and every dollar of growth come out completely tax-free once you meet the age and account-age requirements. With a traditional IRA, you generally get a tax deduction on your contribution today, but every dollar you withdraw in retirement, including all the growth, is taxed as ordinary income.

Which one wins depends mostly on your tax bracket now versus your expected tax bracket in retirement. If you expect to be in a higher tax bracket later, paying tax on contributions now at a lower rate and withdrawing tax-free later is usually the better deal. If you expect a lower tax bracket in retirement, the upfront deduction from a traditional IRA can be worth more. Many people split the difference and hold both account types for tax diversification, giving themselves flexibility to manage taxable income in retirement by choosing which account to draw from each year.

A Roth IRA also has no required minimum distributions during your lifetime, which gives you more control over when and how much you withdraw.

2026 Roth IRA contribution limits

For 2026, the IRS allows contributions of up to $7,500 per year to a Roth IRA if you are under age 50. If you are 50 or older, you can add a $1,100 catch-up contribution for a total of $8,600 per year. These figures apply across all your IRAs combined, not per account, so if you have more than one IRA the total across them cannot exceed the limit.

Unlike a traditional IRA, a Roth IRA also has income limits. Once your income rises into the phase-out range for your filing status, your allowed contribution shrinks, and above the top of that range you cannot contribute directly at all. These thresholds change from year to year, so check current IRS limits for your filing status before you contribute. This calculator does not check income eligibility for you.

Why tax-free growth compounds so much value

The math behind a Roth IRA's advantage comes down to what happens on the way out, not just on the way in. In a taxable brokerage account, every sale of an investment at a gain triggers capital gains tax, which shrinks the amount left to keep compounding. In a traditional IRA, the entire withdrawal, both contributions and growth, is taxed as ordinary income in retirement.

A Roth IRA skips both of those tax events. The formula this calculator uses, FV = PV(1+r)^n + PMT × ((1+r)^n − 1)/r, gives your total balance at retirement, and in a Roth IRA that entire balance is yours to keep, with none of it reduced by a future tax bill. Over a 30 or 35 year career, where growth typically makes up most of the final balance, keeping 100% of that growth is the single biggest reason a Roth IRA can outperform a taxable account or a traditional IRA.

Roth IRA balance by starting age

Starting with a $10,000 balance, contributing the full $7,500 annual limit at a 7% return, retiring at 65 — all tax-free at withdrawal:

Start age	Years	Total contributed	Tax-free growth	Balance at 65
25	40	$310,000	$1,337,008	$1,647,008
30	35	$272,500	$871,043	$1,143,543
35	30	$235,000	$549,578	$784,578
40	25	$197,500	$331,142	$528,642
45	20	$160,000	$186,163	$346,163
50	15	$122,500	$93,558	$216,058

The "tax-free growth" column is where the Roth advantage lives — in a traditional IRA that entire amount would be taxable as ordinary income on withdrawal.

Frequently asked questions

What is the Roth IRA contribution limit by age?

For 2026, the Roth IRA contribution limit is $7,500 per year if you are under age 50. If you are 50 or older, you can contribute an extra $1,100 catch-up amount for a total of $8,600 per year. These limits are set by the IRS and adjust periodically for inflation, so it is worth checking current IRS limits each year.

What is the 5-year rule for Roth IRA withdrawals?

The 5-year rule generally requires your Roth IRA account to have been open for at least 5 years, and you to be age 59.5 or older, before you can withdraw earnings tax-free and penalty-free. Your own contributions, since they were already taxed before you deposited them, can generally be withdrawn at any time without tax or penalty. It is the earnings portion that carries the 5-year and age requirement.

Are there income limits for contributing to a Roth IRA?

Yes. Unlike a traditional IRA, a Roth IRA has income phase-out ranges that limit or eliminate your ability to contribute directly once your income rises above certain thresholds set by the IRS. These thresholds change and are adjusted for inflation, so check current IRS limits for your filing status before assuming you are eligible.

Does this calculator account for the Roth IRA income phase-out?

No. This calculator assumes you are eligible to contribute the full amount you enter each year. It does not check your income against IRS phase-out ranges. If your income is near or above the phase-out range for your filing status, confirm your eligibility with current IRS guidance or a tax professional before relying on these projections.

Why are Roth IRA withdrawals tax-free?

Roth IRA contributions are made with money that has already been taxed, so the IRS does not tax it again when you withdraw it. Because the growth on those contributions is also withdrawn tax-free once you meet the age and 5-year requirements, every dollar your investments earn inside the account stays yours, unlike a traditional IRA where the full withdrawal is taxed as ordinary income.