Roth IRA Calculator
Project your tax-free retirement balance and compare to a Traditional IRA. Includes 2026 contribution and income limits.
Roth IRA balance at age 65
| Metric | Roth IRA | Traditional IRA |
|---|---|---|
| Contribution tax treatment | Post-tax | Pre-tax (deductible) |
| Tax savings now (lifetime) | $0 | $53,900 |
| Final balance at age 65 | $1,142,160 | $1,142,160 |
| After-tax value at withdrawal | $1,142,160 | $890,885 |
| Withdrawal tax | $0 (tax-free) | $251,275 (22%) |
Roth vs Traditional IRA — the core trade-off
Both Roth and Traditional IRAs let your investments grow without paying tax on dividends, interest, or capital gains along the way. The difference is when you pay income tax: at contribution time (Roth) or at withdrawal time (Traditional). That single timing difference is the entire decision.
Mathematically, if your marginal tax rate is the same in both periods, the two accounts produce identical after-tax outcomes — the order of operations is commutative. The Roth advantage shows up only when your retirement tax rate is higher than your current rate. The Traditional advantage shows up when your current rate is higher than your retirement rate. Everything else — the 4% rule, the right asset allocation, the importance of compounding — applies equally to both.
Two non-tax considerations tilt slightly toward Roth for most people: (1) Roth contributions can be withdrawn any time without penalty, giving you a partial emergency fund inside a retirement account. (2) Roth IRAs have no required minimum distributions (RMDs) during the original owner's lifetime — you can leave them growing tax-free forever, which is powerful for legacy planning.
When Roth wins
Roth is the default recommendation when any of the following apply:
- Early career, low current bracket. A 25-year-old in the 12% bracket today will almost certainly be in a higher bracket by age 65. Pay 12% now, skip whatever-rates-look-like later.
- You expect tax rates to rise. The current US federal brackets expire at the end of 2025 absent congressional action — many planners believe future rates trend higher to fund deficits and entitlements.
- You want tax-free flexibility in retirement.Roth withdrawals don't count toward Social Security taxation thresholds, Medicare IRMAA surcharges, or capital gains rate brackets. That's real money for high-net-worth retirees.
- You want to leave money to heirs. No RMDs means the account keeps compounding tax-free. Inherited Roths still grow tax-free for the heir (subject to the 10-year payout rule for non-spouse beneficiaries).
- You want forced tax diversification.If your entire retirement is in pre-tax 401(k) and Traditional IRA money, you're a captive to whatever ordinary-income rates exist in 30 years. Even a small Roth bucket gives you optionality.
When Traditional wins
Traditional (deductible) is mathematically better when your current marginal tax rate exceeds your expected retirement rate. Common cases:
- Peak-earning years in a high bracket. A dual-income couple in their late 40s in the 32% or 35% bracket will likely retire on a much smaller taxable income — somewhere in the 12–22% range. Deducting at 35% and paying back at 22% is a guaranteed arbitrage.
- You plan to retire in a lower-tax state. Moving from California (13.3% top state rate) to Florida or Texas (0%) at retirement is a meaningful tax-rate reduction layered on top of the federal arbitrage.
- You will spend the upfront tax savings on additional investing. The Traditional vs Roth math only equalizes when the deduction is reinvested. If you put the savings in a taxable brokerage, Traditional pulls ahead in high-bracket scenarios.
Note that even high earners often can't deduct Traditional IRA contributions if they (or a spouse) have a workplace retirement plan — the deduction phases out quickly. In that case the Traditional IRA contribution becomes non-deductible, losing its main advantage, which is exactly the setup for a backdoor Roth.
2026 contribution and income limits
- Contribution limit: $7,000 ($8,000 if age 50 or older — the extra $1,000 is the catch-up).
- Earned income required:you can only contribute up to your taxable compensation for the year (so a non-working spouse can use the working spouse's income via a spousal IRA).
- Single filer phase-out: begins at ~$146,000 MAGI, fully phased out at ~$161,000.
- Married filing jointly phase-out: begins at ~$230,000 MAGI, fully phased out at ~$240,000.
- Married filing separately phase-out: brutal — starts at $0, fully phased out at $10,000. (If you live with your spouse — different rules apply if you live apart.)
The IRS adjusts these limits annually for inflation. Phase-outs are linear: at the midpoint, you can contribute exactly half. Use IRS Worksheet 2-2 in Publication 590-A for the exact reduction calculation when partially phased out.
Backdoor Roth strategy
For high earners over the income cap, the backdoor Roth is a legal two-step that adds $7,000–$8,000/year of Roth space:
- Contribute to a Traditional IRA (no income limit on contributions — only on the deductibility, which doesn't matter here).
- Convert the Traditional IRA to a Roth IRA. There's no income limit on conversions. Tax is owed on any growth between step 1 and step 2 — keep the gap short (days, not months) to minimize this.
Critical pitfall — the pro-rata rule. The IRS treats all your Traditional IRA balances as a single pool when calculating the taxable portion of a conversion. If you have a $93,000 pre-tax rollover IRA and contribute $7,000 non-deductible, then convert $7,000, the IRS treats 93% of that conversion as taxable. The fix: roll any pre-tax IRA balances into a 401(k) first (most employer plans accept incoming rollovers), leaving you with $0 in pre-tax IRA dollars before doing the backdoor.
Mega-backdoor Roth is a separate strategy for people whose 401(k) plans allow after-tax (non-Roth) contributions and in-service distributions or in-plan Roth conversions. It can fit up to ~$45,000/year of additional Roth contributions, but it requires specific 401(k) plan features — check with HR before counting on it.
Withdrawal rules
Roth withdrawal rules are unusually flexible compared to other retirement accounts:
- Contributions: withdrawable at any time, at any age, for any reason, with no tax and no penalty. This is because contributions were already taxed.
- Earnings — qualified withdrawal:tax-free and penalty-free if you're 59½+ AND the Roth has been open at least 5 years (the “5-year rule” — measured from January 1 of the year you first contributed).
- Earnings — non-qualified withdrawal: ordinary income tax + 10% penalty, with carve-outs for first-home purchase ($10K lifetime), qualified higher-education expenses, qualified birth/adoption expenses ($5K), disability, and inherited Roths.
- Conversion basis (backdoor money):each conversion has its own 5-year clock for penalty purposes — important to track if you're doing annual backdoors and may need to access the money before 59½.
- RMDs:none during the original owner's lifetime. The Roth keeps compounding even into late retirement. (Inherited Roth IRAs do have a 10-year payout rule for non-spouse beneficiaries, courtesy of the SECURE Act.)
Pair this with our 401(k) Calculator to see your full retirement picture, the Investment Calculator for general portfolio projection, and the Compound Interest Calculator for intuition on how reinvested gains stack up over time.