Roth IRA Calculator

Understanding Roth IRA Contributions and Tax-Free Growth

A Roth IRA is one of the most powerful retirement accounts available to individual investors. Unlike a Traditional IRA or 401(k), a Roth IRA is funded with after-tax dollars—meaning you pay taxes on your contributions now, but your money grows completely tax-free for the rest of your life. When you withdraw in retirement, you owe nothing to the IRS. Not on the growth, not on the original contributions, not on anything.

This makes a Roth IRA calculator an essential planning tool. By modeling your contributions, expected returns, and tax brackets over time, you can see exactly how much tax-free wealth you could accumulate by retirement—and whether a Roth or Traditional IRA makes more sense for your situation. If you are just beginning to think about retirement, our retirement calculator provides a broader view of all your savings goals.

How the Roth IRA Calculator Works

This calculator projects the growth of annual contributions over time using compound interest. The key difference from a standard investment calculator is that it accounts for the tax treatment of both Roth and Traditional IRAs:

• Roth IRA: You contribute after-tax dollars. The entire balance—contributions and growth—is yours tax-free at retirement. The after-tax value equals the full account value.
• Traditional IRA: You contribute pre-tax dollars (getting a tax deduction today). The entire balance is taxed as ordinary income when you withdraw in retirement. The after-tax value equals the account value minus your retirement tax rate applied to the full balance.

The comparison hinges on one question: is your tax rate higher now, or will it be higher in retirement? If you're in a lower bracket now (common for younger workers), the Roth wins because you lock in taxes at today's lower rate. If you expect to be in a much lower bracket in retirement, the Traditional IRA's upfront deduction may save you more.

Roth vs Traditional IRA: The Complete Comparison

The Roth vs Traditional debate is one of the most common questions in personal finance, and for good reason—it can mean a difference of tens or even hundreds of thousands of dollars over a career. Here's how they stack up:

Consider a practical example. Suppose you're 30 years old, in the 24% tax bracket, and you contribute $7,000 per year to a Roth IRA for 35 years at a 7% average annual return. At retirement at 65:

• Roth IRA value: approximately $1,030,000—all tax-free
• Traditional IRA value: same $1,030,000 pre-tax, but at a 20% retirement tax rate, your after-tax value is approximately $824,000
• Roth advantage: roughly $206,000 more in your pocket

The math shifts in the Traditional IRA's favor only when your retirement tax rate is significantly higher than your current rate, which is relatively uncommon. Most people's income—and therefore tax rate—drops in retirement when they stop working.

2026 Roth IRA Contribution Limits

For the 2026 tax year, the IRS allows the following Roth IRA contribution amounts:

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

These limits apply to your total IRA contributions across all Traditional and Roth IRAs combined. If you contribute $4,000 to a Traditional IRA, you can only put $3,000 into a Roth IRA (assuming you're under 50). The limit is per person, not per account, so married couples can each contribute the full amount to their own Roth IRAs regardless of which spouse earns the income (known as a spousal IRA).

Income Phase-Out Ranges for 2026

Unlike a Traditional IRA, the Roth IRA has income limits that restrict who can contribute directly. For 2026:

• Single / Head of Household: Full contribution below $150,000 MAGI. Phase-out between $150,000 and $165,000. No direct contribution above $165,000.
• Married Filing Jointly: Full contribution below $236,000 MAGI. Phase-out between $236,000 and $246,000. No direct contribution above $246,000.
• Married Filing Separately: Phase-out between $0 and $10,000. No direct contribution above $10,000.

If your income falls within the phase-out range, your maximum contribution is proportionally reduced. Use the eligibility checker above to see exactly how much you can contribute. If your income exceeds the limits entirely, the backdoor Roth strategy (described below) is your path forward.

Backdoor Roth IRA: How High Earners Can Still Contribute

The backdoor Roth IRA is a legal strategy that allows high-income earners to fund a Roth IRA even when their income exceeds the direct contribution limits. There is no income limit on Roth conversions—only on direct contributions. Here's how it works:

1. Contribute to a Traditional IRA. Make a non-deductible contribution (since your income likely exceeds the deductibility limits too). There is no income limit for making non-deductible Traditional IRA contributions.
2. Convert to a Roth IRA. Shortly after the contribution settles (usually a few business days), convert the entire Traditional IRA balance to your Roth IRA. This is called a Roth conversion.
3. Pay taxes on any gains. If the funds earned any interest between the contribution and conversion (typically minimal if done quickly), you'll owe income tax on that small gain. The original contribution was already taxed, so no additional tax is owed on that portion.
4. File Form 8606. Report the non-deductible contribution and conversion on your tax return. This is how the IRS tracks that you already paid taxes on the contributed amount.

Mega Backdoor Roth: The Advanced Strategy

If your employer's 401(k) plan allows after-tax contributions and in-plan Roth conversions (or in-service distributions), you may be able to contribute up to the total 401(k) limit ($70,000 for 2026 including employer match) and convert the after-tax portion to Roth. This "mega backdoor Roth" dramatically accelerates Roth savings, though it requires specific plan features that not all employers offer.

Investment Strategy Inside a Roth IRA

Because Roth IRA growth is permanently tax-free, it makes sense to hold your highest-growth investments here. Assets you expect to appreciate significantly—like growth stocks, small-cap index funds, or emerging market funds—benefit most from tax-free compounding. Conversely, bonds and other lower-growth, income-producing assets may be better suited for taxable accounts where the tax impact is smaller. For help building a diversified portfolio, try our portfolio allocation calculator.

Most financial advisors recommend broad, low-cost index funds as the core holding in a Roth IRA. An S&P 500 index fund or total stock market fund with an expense ratio below 0.10% is a common choice. Over decades of tax-free compounding, even small fee differences can compound into significant sums—which is why keeping costs low matters even more in a tax-advantaged account. Our compound interest calculator can help you visualize the impact of different return assumptions.

When a Traditional IRA Makes More Sense

While the Roth IRA gets most of the attention, there are legitimate scenarios where a Traditional IRA is the better choice:

• Peak earning years: If you're in the 32% or 37% bracket now but expect to withdraw at the 22% or 24% bracket in retirement, the upfront deduction saves you more than the future tax-free growth.
• State tax arbitrage: If you live in a high-income-tax state now but plan to retire in a no-income-tax state (Florida, Texas, Nevada, etc.), the Traditional IRA deduction at your current state rate is more valuable.
• Short time horizon: If you're close to retirement with only a few years of contributions ahead, the Roth's advantage from decades of tax-free growth is diminished.

Many advisors recommend a mix of both: contribute to a Roth IRA and a Traditional 401(k), diversifying your tax exposure. This gives you flexibility in retirement to draw from whichever account minimizes your tax bill in any given year. For a deeper look at 401(k) planning, see our retirement savings calculator.