Roth IRA Calculator

A Roth IRA is an individual retirement account funded with money you have already paid tax on. The trade-off is simple: no deduction now, but no tax later on qualified withdrawals, including all of the growth. The calculator compares a Roth with a taxable brokerage account holding the same investments, where the growth is taxed each year.

With the defaults, $30,000 plus $7,500 a year at 6% grows to $1,066,343 in a Roth IRA by age 65. Of that, $292,500 is money you put in and $773,843 is tax-free growth. The same contributions in a taxable account, losing a quarter of each year's gain to tax, end at about $751,245 after $152,915 of taxes, more than $315,000 behind the Roth.

Roth IRA Contributions

For 2026, you can contribute up to $7,500 to all of your IRAs combined, traditional and Roth, or $8,600 if you are 50 or older, but not more than your taxable compensation for the year. A spouse with little or no income can contribute to a spousal Roth IRA based on the working spouse's earnings when filing jointly.

The ability to contribute directly phases out at higher incomes. For 2026, the phase-out range is $153,000 to $168,000 of modified AGI for single filers and heads of household and $242,000 to $252,000 for married couples filing jointly; married people filing separately who lived with their spouse phase out between $0 and $10,000. Contributions for a tax year can be made until the tax filing deadline the following April. Unlike a traditional IRA, there is no age limit for contributing as long as you have earned income.

Roth IRA Distribution Details

Roth withdrawals follow ordering rules that make the account unusually flexible. Your regular contributions come out first, and they can be withdrawn at any time, at any age, without tax or penalty, since you already paid tax on them. Converted amounts come out next, and each conversion has its own five-year clock for the 10% penalty if you are under 59½. Earnings come out last.

Earnings are tax-free and penalty-free in a qualified distribution, which requires that the account owner be 59½ or older, disabled or deceased, or be using up to $10,000 for a first home, and that at least five tax years have passed since the first contribution to any Roth IRA. Earnings withdrawn otherwise are taxed and may face the 10% additional tax, with the same exceptions that apply to traditional IRAs, such as higher education costs.

Roth IRAs have no required minimum distributions during the original owner's lifetime. Most non-spouse beneficiaries must empty an inherited Roth within ten years, but the withdrawals remain tax-free.

Pros of Roth IRA

Several features make the Roth one of the most flexible retirement accounts available.

• Tax-free growth and withdrawals: every dollar of growth is yours in retirement, which is especially valuable for young savers with decades of compounding ahead.
• Protection against higher future tax rates: you lock in today's tax rate on the money, a hedge if your income or tax rates rise.
• No required minimum distributions: the money can keep growing for as long as you live, which helps with estate planning and controlling taxable income in retirement.
• Access to contributions: contributions can be taken back at any time without tax or penalty, so a Roth can double as a backup emergency fund.
• Lower taxable income in retirement: Roth withdrawals do not count toward the income that determines how much of your Social Security is taxed or your Medicare premium surcharges.
• Tax diversification: holding both pre-tax and Roth money lets retirees choose each year which account to draw from to manage their bracket.
• Tax-free inheritance: heirs receive the money without income tax, though most must withdraw it within ten years.
• Wide investment choice: like any IRA, a Roth can hold stocks, bonds, funds, ETFs and CDs at the provider of your choice.

Cons of Roth IRA

The Roth is not the best choice for everyone or every dollar.

• No upfront deduction: contributing to a Roth raises your current tax bill compared with a deductible traditional IRA. If your tax rate in retirement will be lower than it is today, a traditional account usually ends up with more after-tax money, as the IRA calculator on this site shows.
• Income limits: high earners cannot contribute directly and must use the backdoor approach of contributing to a traditional IRA and converting it.
• Low contribution limit: $7,500 a year is modest compared with workplace plans, so a Roth IRA alone cannot fund most retirements.
• Five-year rules: earnings, and converted amounts for people under 59½, have waiting periods before they come out tax- and penalty-free, which complicates planning for people who start late.
• Uncertain future rules: the tax-free promise depends on future law. Congress has not taxed Roth withdrawals, but the possibility cannot be ruled out entirely.
• Opportunity cost: money paid in tax today could otherwise be invested; for a saver who would invest the tax savings from a traditional contribution, the comparison is closer than it looks.

Converting Traditional IRAs into Roth IRAs

A Roth conversion moves money from a traditional IRA, or from a pre-tax 401(k) or similar plan, into a Roth IRA. Since 2010, anyone can convert regardless of income. The converted amount, minus any nondeductible contributions already taxed, is added to your taxable income for the year, but there is no 10% penalty on the conversion itself. After that, the money grows tax-free under Roth rules. Conversions cannot be undone; the option to recharacterize a conversion was eliminated starting in 2018.

Conversions make the most sense when your current tax rate is lower than the rate you expect when the money would otherwise be withdrawn. Common windows include years with unusually low income, such as a sabbatical, a business loss or a job gap, and the years between retirement and the start of Social Security and required distributions, when many retirees are in their lowest bracket in decades. Converting in a down market also helps, because the same number of shares converts at a lower taxable value and the recovery happens inside the Roth.

It is usually best to pay the conversion tax from money outside the IRA. Using IRA money to pay the tax shrinks the amount that ends up in the Roth and, if you are under 59½, the withheld part may count as an early distribution subject to the 10% penalty.

Partial conversions spread over several years can keep income within a target bracket rather than pushing a large amount into the top brackets in one year. Before converting, check the side effects of the higher income: it can make more of your Social Security taxable, raise Medicare Part B and D premiums two years later through income-related surcharges, reduce eligibility for premium tax credits on marketplace health insurance and affect financial aid.

High earners who cannot contribute to a Roth directly often use a backdoor Roth: contribute to a traditional IRA without taking a deduction, then convert it to a Roth soon after. If you have no other pre-tax IRA money, little or no tax is due. If you do have other traditional, SEP or SIMPLE IRA balances, the pro-rata rule treats the conversion as coming proportionally from pre-tax and after-tax money across all of them, so part of it becomes taxable. Rolling those pre-tax balances into a workplace 401(k) first can avoid that. Some 401(k) plans also allow after-tax contributions above the regular limit that can be converted to Roth, often called the mega backdoor Roth.

Each conversion starts its own five-year clock for penalty purposes if you are under 59½, so plan conversions well before you need the money. Converting is a tax decision with long-term consequences; a tax professional can model the effect on your brackets and benefits.

Frequently asked questions

Sources

• IRS – Roth IRAs
• IRS – Individual Retirement Arrangements (IRAs)
• Investor.gov – U.S. Securities and Exchange Commission