Roth IRA Calculator

Q: How much can I contribute to a Roth IRA?

For 2025: $7,000 per year, or $8,000 if you're 50 or older. Eligibility phases out at higher incomes (starting at $150,000 modified AGI for single filers, $236,000 married filing jointly for 2025); above the limit, the backdoor Roth conversion route may still be available.

Q: Why is a Roth IRA so powerful?

Every dollar of growth is tax-free at withdrawal (after 59½ and the 5-year rule). $7,000 per year for 30 years at 7% grows to about $660,000 — and unlike a traditional account, none of it is owed to the IRS. Contributions (not earnings) can also be withdrawn any time without penalty.

Q: Roth IRA or traditional IRA?

Roth wins if your tax rate in retirement will be equal or higher than today — common for young savers and diligent accumulators. Traditional wins for peak-earning years at high brackets. When in doubt, Roth's flexibility (no required minimum distributions, tax-free inheritance) is a strong tiebreaker.

Project your tax-free balance at retirement — and see how much the Roth wrapper saves compared with the same investing in a taxable account.

Tax-free balance at 65

—

Total contributed

—

Tax-free growth

—

Same plan, taxable account

—

Roth advantage

—

Why tax-free growth compounds differently

In a taxable account, taxes on dividends and gains skim a slice of every year's return, and that slice never gets to compound. In a Roth, the full return compounds every year and the IRS never takes a cut at the end:

Roth: full return compounds, withdrawals tax-free
Taxable (approx.): effective return ≈ return × (1 − tax rate)

Worked example

Age 30 → 65 · $10,000 start · $7,000/yr at 7%:

Roth balance ≈ $1.1M, all withdrawable tax-free. The same contributions in a taxable account (15% drag on returns) end near $890,000 — the wrapper alone is worth over $200,000.

2025 contribution limits and income rules

Rule (2025)	Amount
Contribution limit (under 50)	$7,000
Contribution limit (50+)	$8,000
Single phase-out begins (MAGI)	$150,000
Married filing jointly phase-out begins	$236,000

Above the phase-out, the "backdoor Roth" (nondeductible traditional contribution converted to Roth) remains a standard, legal workaround — mind the pro-rata rule if you hold pre-tax IRA money. Roths also skip required minimum distributions entirely, making them the best account to inherit and the last one to spend. Sequence-wise, most planners put Roth contributions right after capturing the 401(k) match. See the accumulation big picture in the retirement calculator.

Frequently asked questions

How much can I contribute to a Roth IRA?

2025: $7,000/yr ($8,000 at 50+), phasing out from $150k MAGI single / $236k joint. Backdoor conversions may work above that.

Why is a Roth IRA so powerful?

All growth is tax-free at withdrawal; $7,000/yr for 30 years at 7% ≈ $660,000 with zero owed. Contributions stay accessible penalty-free.

Roth IRA or traditional IRA?

Roth if your retirement tax rate will match or beat today's; traditional at peak brackets. Roth's no-RMD flexibility is a strong tiebreaker.

Related calculators

Note: Limits and phase-outs are for tax year 2025 and change annually; the taxable comparison is approximate. Not financial or tax advice. Last reviewed: July 2026.