Roth IRA Calculator

It depends on contributions and returns. Contributing $7,000 a year at a 7% average return reaches about $287,000 in 20 years (starting from zero at age 45) and about $1,397,000 in 40 years (starting at 25). Every dollar of those earnings is tax-free on qualified withdrawal, which is what the calculator's tax-savings estimate quantifies.

The arithmetic is identical — future value with compound growth — but the interpretation differs. In a Roth IRA, the entire projected balance is yours: no tax is subtracted from the earnings on qualified withdrawal. When projecting a taxable account you would need to haircut the growth for annual dividend tax and eventual capital gains, which is exactly the comparison the estimated-tax-savings output makes.

For 2025 you can contribute up to $7,000 ($8,000 at age 50 or older), but only if your modified adjusted gross income is below the phase-out range — roughly $150,000–$165,000 single or $236,000–$246,000 married filing jointly. Within the range the allowed amount shrinks; above it, direct contributions are not allowed and the backdoor conversion path is the common alternative. These figures change with inflation, so confirm against current IRS guidance. Note this page is an estimate tool — for planning around limits, consult a tax professional.

Yes, on the back end. You contribute after-tax money, so there is no upfront deduction; in exchange, qualified withdrawals — after age 59½ and five years after your first contribution — are free of federal income tax, including all accumulated earnings. Non-qualified earnings withdrawals face income tax plus a 10% penalty, though your own contributions can come out anytime without tax or penalty.

The core question is tax timing: do you expect to be taxed at a higher rate now or in retirement? Roth wins when your current rate is low (early career) or you expect higher rates later; traditional wins when your retirement rate will be lower. Many savers split the difference — capture any employer 401(k) match first, then fill a Roth IRA. Projecting the Roth here and applying your expected retirement bracket to a traditional balance is a reasonable way to compare.

Excess contributions incur a 6% excise tax for each year they remain in the account. Fix it by withdrawing the excess (plus any earnings on it) before the tax-filing deadline, or by applying it to the next year's limit if room allows. The calculator flags planned contributions above the 2025 limit so you can catch this before it happens.

No. It is an educational projection with standard compound-growth mathematics and simplified assumptions. Eligibility, phase-outs, conversions and five-year-rule subtleties are individual and change with tax law. Use the numbers for planning intuition and confirm decisions with the IRS publications or a qualified tax professional.