Roth IRA Calculator

2026 Roth IRA Contribution Limits

Under 50: $7,000/year ($583/month) | Age 50+: $8,000/year ($667/month, catch-up contribution). Income limits apply — single filers phase out at $150k–$165k MAGI; married filing jointly at $236k–$246k MAGI.

The defaults below model a 30-year-old maxing out their Roth IRA at $583/month ($7,000/year) with a $7,000 starting balance, targeting a 7% annual return — roughly the S&P 500's inflation-adjusted historical average.

Why the Roth IRA Is So Powerful

The Roth IRA's superpower isn't the return rate — it's tax-free compounding. In a regular brokerage account, you pay capital gains taxes each year on dividends and when you sell. In a Roth IRA, all growth is completely tax-free, and qualified withdrawals in retirement are tax-free too.

$736kRoth IRA (30 yrs, tax-free)

~$552kTaxable account (after 22% tax drag)

$184kValue of tax-free growth

Assumes $583/mo, 7% return, 30 years, 22% marginal tax rate on gains.

Roth IRA vs Traditional IRA

	Roth IRA	Traditional IRA
Contributions	After-tax (no deduction)	Pre-tax (may be deductible)
Growth	Tax-free	Tax-deferred
Withdrawals	Tax-free (qualified)	Taxed as ordinary income
Required Minimum Distributions	None	Starting at age 73
Early withdrawal (principal)	Anytime, no penalty	10% penalty + taxes
Best if you expect tax rate to…	Rise in retirement	Fall in retirement

Roth IRA Investment Strategy

Because a Roth IRA grows completely tax-free, you want your highest-growth assets inside it — not bonds or cash equivalents. Common Roth IRA investment strategies:

Total market index fund — broad US exposure, ~10% historical return, very low fees (Vanguard VTSAX, Fidelity FZROX)
S&P 500 index fund — 500 largest US companies, ~10% historical return
Three-fund portfolio — US stocks + international stocks + bonds, rebalanced annually
Target-date fund — automatically rebalances from aggressive to conservative as retirement approaches

Backdoor Roth IRA

If your income exceeds the Roth IRA limits, the "backdoor Roth" strategy lets you contribute to a Traditional IRA and convert it to a Roth. This is a legal tax strategy used by high earners. Consult a tax advisor before using it.

Frequently Asked Questions

For a fully qualified tax-free withdrawal, your Roth IRA must be at least 5 years old AND you must be at least 59½. You can always withdraw your original contributions (not earnings) at any time without tax or penalty. Early withdrawal of earnings may trigger a 10% penalty plus income tax.

Yes. You can contribute to both in the same year, subject to separate contribution limits. A common strategy: contribute to your 401(k) up to the employer match (free money), then max out your Roth IRA, then go back to the 401(k) if you have more to save.

Any amount helps — even $50/month. The key is consistency and starting early. Contributing $100/month for 35 years at 7% grows to over $175,000. Missing a year's contribution can be made up by contributing extra in future years, up to the annual limit.

You must hold the Roth IRA for at least 5 years before withdrawing earnings tax-free, even if you're over 59½. The clock starts January 1st of the tax year you make your first contribution. Contributions can be withdrawn anytime; only earnings are subject to the 5-year rule.

Roth IRA Compound Interest Calculator