Roth IRA Calculator

Contributions are made with after-tax dollars, but all growth and qualified withdrawals are completely tax-free. No required minimum distributions (RMDs) in retirement. This makes Roth IRAs ideal if you expect to be in a higher tax bracket in retirement, or if you want tax flexibility.

$7,000 per person ($8,000 if age 50+). However, income limits apply. Single: full contribution under $150,000 MAGI, phases out to $165,000. Married jointly: full under $236,000, phases out to $246,000. Over these limits: consider the backdoor Roth strategy.

Roth: pay taxes now, withdraw tax-free later. Best if you expect higher taxes in retirement or are in a low bracket now. Traditional: deduct now, pay taxes later. Best if you expect lower taxes in retirement or need the deduction now. Both are valuable — many financial advisors recommend contributing to both for tax diversification.

If your income exceeds Roth IRA limits, you can contribute to a non-deductible traditional IRA (no income limits) and immediately convert it to a Roth IRA. This is legal and widely used. Beware the pro-rata rule if you have other traditional IRA balances — consult a tax advisor.

Contributions (not earnings) can be withdrawn any time, tax-free and penalty-free — they were already taxed. Earnings can be withdrawn tax-free and penalty-free after age 59.5 AND the account is 5+ years old. The flexibility to access contributions without penalty is an advantage over 401(k)s.