Roth IRA Calculator (US)
Compare Roth IRA vs Traditional IRA retirement growth side by side. Compute tax-free withdrawals, tax savings, and projected balances for US investors.
About This Calculator
A Roth IRA is a powerful retirement savings vehicle that offers tax-free withdrawals in retirement. Our calculator compares Roth IRA growth against Traditional IRA growth, taking into account your current tax bracket to show the potential tax savings of choosing Roth over Traditional.
The calculator projects both accounts side by side, showing how a Roth IRA's tax-free withdrawals compare to a Traditional IRA's pre-tax contributions and taxable withdrawals. The comparison chart and growth chart help you visualize the differences.
Key Differences:
- Roth IRA: After-tax contributions, tax-free withdrawals, no RMDs
- Traditional IRA: Pre-tax contributions (deductible), taxable withdrawals, RMDs at 73
- Roth IRA: Contributions can be withdrawn anytime penalty-free
- Traditional IRA: Early withdrawals subject to penalty
- Roth IRA: Income limits for direct contributions
- Traditional IRA: Deduction limits if workplace plan available
When to Choose Roth IRA:
- You expect to be in a higher tax bracket in retirement
- You want tax-free retirement income
- You want flexibility to withdraw contributions
- You want to avoid RMDs
- You're in a low tax bracket now
Frequently Asked Questions
What is a Roth IRA?
A Roth IRA is a tax-advantaged retirement account where contributions are made with after-tax dollars. The key benefit is that qualified withdrawals in retirement, including all investment earnings, are completely tax-free. Roth IRAs also have no Required Minimum Distributions (RMDs) during the owner's lifetime.
What are the Roth IRA income limits?
For 2025, the ability to contribute to a Roth IRA phases out at Modified Adjusted Gross Income (MAGI) of $150,000-$165,000 for single filers and $236,000-$246,000 for married couples filing jointly. Above these limits, you cannot contribute directly to a Roth IRA, but a backdoor Roth IRA conversion may be possible.
What is better, Roth IRA or Traditional IRA?
Roth IRA is better if you expect to be in a higher tax bracket in retirement because withdrawals are tax-free. Traditional IRA is better if you want a tax deduction now and expect lower taxes in retirement. Roth IRA also offers more flexibility with no RMDs and the ability to withdraw contributions anytime.
Can I withdraw from my Roth IRA before retirement?
Yes, you can withdraw your Roth IRA contributions anytime, tax-free and penalty-free. Earnings withdrawals before age 591/2 are generally subject to taxes and a 10% penalty, unless an exception applies (first-time home up to $10,000, disability, etc.). This makes Roth IRA a flexible savings vehicle.
What is the Roth IRA contribution limit for 2025?
The Roth IRA contribution limit for 2025 is $7,000 ($8,000 if age 50 or older). For 2026, the limit increases to $7,500 ($8,600 if age 50 or older). This covers all your IRA accounts combined. You must have earned income at least equal to your contribution amount.
What is a backdoor Roth IRA?
A backdoor Roth IRA is a strategy for high-income earners who exceed the Roth IRA income limits. It involves making a non-deductible contribution to a Traditional IRA and then converting it to a Roth IRA. There is no income limit on Roth conversions, making this a legal way to get money into a Roth IRA.
What are the benefits of Roth IRA vs Traditional IRA?
Key Roth IRA benefits: tax-free withdrawals, no RMDs, can withdraw contributions anytime penalty-free, no income limit for conversions. Key Traditional IRA benefits: immediate tax deduction, lower current taxable income, no income limit for contributions. The choice depends on your current vs future tax rate.
Can I contribute to both a Roth IRA and a Traditional IRA?
Yes, you can contribute to both types of IRAs, but the total contribution across all your IRAs cannot exceed the annual limit ($7,000 in 2025, $8,000 if 50+). For example, you could contribute $3,500 to a Roth IRA and $3,500 to a Traditional IRA, but not more than $7,000 total.
Does a Roth IRA have Required Minimum Distributions?
No, Roth IRAs do not have Required Minimum Distributions (RMDs) during the original owner's lifetime. This makes Roth IRAs excellent for estate planning, as you can leave the account to grow tax-free for your beneficiaries. Spouse beneficiaries can treat it as their own Roth IRA, while non-spouse beneficiaries must distribute within 10 years.
Can I have both a 401(k) and a Roth IRA?
Yes, you can contribute to both a 401(k) and a Roth IRA in the same year. However, Roth IRA contributions are subject to income limits. Having both allows you to diversify your tax treatment in retirement - you'll have tax-deferred (401k), tax-free (Roth IRA), and potentially taxable (brokerage) accounts.