Roth IRA Calculator

What is a Roth IRA Calculator?

A Roth IRA calculator helps you estimate the future value of your Roth IRA retirement savings. Unlike traditional IRAs, Roth IRA contributions are made with after-tax dollars, but qualified withdrawals in retirement are completely tax-free—including all investment gains.

How to Use This Calculator

1. Enter Your Current Age: Input your current age
2. Set Retirement Age: Choose when you plan to start withdrawals (typically 59½ or later)
3. Enter Current Balance: Input your current Roth IRA balance
4. Set Annual Contribution: Enter how much you plan to contribute each year
5. Enter Your Income: Input your Modified Adjusted Gross Income (MAGI)
6. Select Filing Status: Choose Single or Married Filing Jointly
7. Review Results: See your projected balance, eligibility, and tax-free income

2025 Contribution Limits

Annual Contribution Limits

• Under age 50: $7,000 per year
• Age 50 and older: $8,000 per year (includes $1,000 catch-up contribution)

Income Limits for 2025

Single, Head of Household, or Married Filing Separately (not living with spouse)

• Full contribution: MAGI below $150,000
• Partial contribution: MAGI $150,000 - $165,000
• No contribution allowed: MAGI $165,000 or more

Married Filing Jointly or Qualifying Surviving Spouse

• Full contribution: MAGI below $236,000
• Partial contribution: MAGI $236,000 - $246,000
• No contribution allowed: MAGI $246,000 or more

The Formula Behind the Calculation

Future Value Formula: FV = PV × (1 + r)^n + PMT × [((1 + r)^n - 1) / r]

Where:

• FV = Future Value (balance at retirement)
• PV = Present Value (current Roth IRA balance)
• r = Monthly interest rate (annual return ÷ 12)
• n = Number of months until retirement
• PMT = Monthly contribution (annual contribution ÷ 12)

Tax-Free Withdrawal (4% Rule):

• Withdraw 4% of your portfolio in the first year of retirement
• This provides sustainable income for approximately 30 years
• All withdrawals from a Roth IRA are tax-free (after age 59½ with 5-year holding period)

Roth IRA Benefits

Tax-Free Growth

All investment earnings grow tax-free. Unlike taxable accounts, you won't pay capital gains taxes on your profits.

Tax-Free Withdrawals

Qualified distributions in retirement are completely tax-free, including all gains.

No Required Minimum Distributions

Unlike Traditional IRAs, Roth IRAs have no RMDs during the owner's lifetime, allowing your money to grow longer.

Contribution Flexibility

You can withdraw your contributions (not earnings) at any time without penalty.

Roth vs Traditional IRA

Frequently Asked Questions

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

Yes! Roth IRA limits are separate from 401(k) limits. You can maximize both.

What if my income is too high?

Consider a "Backdoor Roth IRA"—contribute to a Traditional IRA and convert it to a Roth. Consult a tax professional.

When can I withdraw tax-free?

Qualified withdrawals require being age 59½+ AND having the account open for at least 5 years.

Should I choose Roth or Traditional?

If you expect to be in a higher tax bracket in retirement, Roth is typically better. If you're in a high bracket now and expect lower retirement income, Traditional may be better.

What's the catch-up contribution?

Once you turn 50, you can contribute an additional $1,000 per year ($8,000 total in 2025).

Important Considerations

• 5-Year Rule: Earnings must be in the account for 5 years before tax-free withdrawal
• Market Volatility: Returns are not guaranteed and will fluctuate
• Income Verification: MAGI includes income adjustments; consult IRS guidelines
• Spousal IRA: Even non-working spouses can contribute if filing jointly

Disclaimer: This calculator provides estimates for educational purposes only. Tax laws change frequently. Consult with a qualified financial advisor or tax professional for personalized advice.