Balance at Retirement
Total Contributions
Tax-Free Growth
Table of Contents
Why this calculator matters
The Roth IRA is the most tax-efficient retirement vehicle most Americans can access — pay tax now, then never again on the growth or the withdrawals. This calculator projects exactly how that tax-free compounding plays out over decades using the IRS's current contribution limits.
| Year | Age | Annual Contribution | Interest Earned | Balance |
|---|
How a Roth IRA balance is projected
The Roth IRA grows under the same compound-growth math as any other tax-advantaged account — with the bonus that no tax drag ever applies. The standard formula:
FV = B0(1 + r)t + C × [ ((1 + r)t − 1) ÷ r ]
- FV — projected balance at retirement
- B0 — current Roth IRA balance
- C — annual contribution
- r — expected annual return (decimal)
- t — years to retirement
Worked example using the calculator's defaults (age 30 to 65, $5,000 starting balance, $7,000/year contributions, 7% return):
- t = 35 years
- (1.07)35 ≈ 10.677
- Starting balance grows to: 5,000 × 10.677 = $53,383
- Annual contributions grow to: 7,000 × (9.677 ÷ 0.07) ≈ $967,696
- Projected balance: ≈ $1,021,079
- Total contributed: 5,000 + (7,000 × 35) = $250,000
- Tax-free growth: $771,079
That entire $1.02M is yours to withdraw tax-free in retirement. In a taxable brokerage with the same returns, you'd owe long-term capital gains tax on the growth — at 15% federal that's roughly $115,000 of additional tax avoided.
2026 Roth IRA contribution limits
The IRS sets two limits: a flat contribution cap and an income-based phase-out.
| Filing status / age | Contribution limit | MAGI phase-out range |
|---|---|---|
| Single / Head of Household, under 50 | $7,000 | $150,000–$165,000 |
| Single / Head of Household, 50+ | $8,000 | $150,000–$165,000 |
| Married Filing Jointly, under 50 | $7,000 each | $236,000–$246,000 |
| Married Filing Jointly, 50+ | $8,000 each | $236,000–$246,000 |
| Married Filing Separately (lived together) | Reduced | $0–$10,000 (essentially blocked) |
If your modified adjusted gross income lands in the phase-out range, your allowed contribution shrinks linearly. Above the upper threshold, direct Roth contributions aren't allowed — but the backdoor Roth strategy (non-deductible traditional IRA → immediate conversion) remains available regardless of income.
Roth vs Traditional IRA: the actual decision
| Traditional IRA | Roth IRA | |
|---|---|---|
| Contribution treatment | May be tax-deductible (income-dependent if you have a workplace plan) | After-tax (never deductible) |
| Growth | Tax-deferred | Tax-free |
| Withdrawals in retirement | Taxed as ordinary income | Tax-free if qualified |
| Early withdrawal of contributions | 10% penalty + tax | No penalty, no tax (contributions only) |
| Required Minimum Distributions | Yes, starting age 73 | None during owner's lifetime |
| 2026 contribution limit | $7,000 ($8,000 if 50+) | $7,000 ($8,000 if 50+) |
| Income phase-out | Deductibility phases out (if workplace plan) | Contributions phase out |
| Best for… | High earners expecting lower tax bracket in retirement | Anyone expecting similar or higher tax later, or wanting flexibility |
The most common "right answer" for a worker in their 20s or 30s in the 12–22% federal brackets is Roth — current rates are historically low, and you'll likely be in higher brackets later. The most common right answer for a high earner in the 32–37% brackets is traditional, since the deduction is worth more now than the bracket arbitrage later.
The 5-year rule explained
Roth IRAs have two different 5-year rules that get conflated:
- 5-year rule for earnings withdrawal. To withdraw earnings tax-free, your first Roth IRA contribution must be at least 5 tax years old AND you must be 59½+. The clock starts January 1 of the year of your first contribution.
- 5-year rule for conversions. Each Roth conversion has its own 5-year clock for the converted amount. If you convert $50k from a traditional IRA at age 56, you must wait until 61 (not 59½) to withdraw that $50k penalty-free if under 59½.
Direct contributions (the after-tax money you put in) can be withdrawn anytime, no tax or penalty, no waiting period. Only earnings and conversions have waiting periods.
Why contributing early matters
Maxing the Roth IRA contribution ($7,000/year) at 7% return, starting at different ages, ending at age 65:
| Start age | Years contributing | Total contributed | Balance at 65 (tax-free) |
|---|---|---|---|
| 22 | 43 | $301,000 | $1.88 million |
| 30 | 35 | $245,000 | $968,000 |
| 40 | 25 | $175,000 | $443,000 |
| 50 | 15 | $105,000 | $176,000 |
The 22-year-old contributes only 3× what the 50-year-old does, but ends with 10× the balance — entirely due to extra decades of tax-free compounding. The Roth contribution limit is "use it or lose it" each year — you can't make up missed years later.
Limitations of this projection
- Constant return assumed. Real markets are volatile. The flat 7% line in the year-by-year table won't match any actual year.
- Contribution limit assumed flat. The IRS occasionally raises the $7,000 cap for inflation. Real future contributions may be larger.
- Income phase-out not modeled. If your MAGI crosses the phase-out range mid-career, your actual contributions in those years would be smaller. The calculator assumes you stay eligible.
- Tax law subject to change. The Roth's tax-free withdrawal benefit is a legislative choice, not a constitutional one. Future Congresses could change the rules — though historically, retirement account tax treatment has only ever been grandfathered, not retroactively changed.
- Nominal dollars. The projected balance is in future dollars. To plan in today's purchasing power, use a real (inflation-adjusted) return such as 4–5% instead of 7%.
- State tax not modeled. Roth withdrawals are federally tax-free; most states follow, but a few (e.g. Pennsylvania for early withdrawals) have quirks worth confirming.
Sources & references
- IRS — Roth IRAs (overview) — official rules, eligibility and 5-year rule.
- IRS — 2026 Roth IRA contribution limits and phase-outs.
- IRS Publication 590-A — full guide to contributions to traditional and Roth IRAs.
- IRS Publication 590-B — full guide to distributions from IRAs, including the 5-year rule.
- SSA — COLA history — inflation series used to index IRA contribution limits.
FAQs
$7,000/year ($8,000 if you're age 50 or older, thanks to the catch-up provision). These figures are the same as 2024 and 2025 — the IRS doesn't bump them every year because inflation indexing rounds in $500 increments. Contributions are subject to MAGI income phase-outs: in 2026, single filers phase out between roughly $150,000–$165,000 and married-filing-jointly phase out between roughly $236,000–$246,000.
Roth wins if you expect a same-or-higher tax bracket in retirement (typical for younger workers and lower-to-mid earners). Traditional wins if you expect a lower bracket later (typical for high earners in peak earning years). The Roth has two practical advantages worth weighting heavily: no Required Minimum Distributions during the owner's lifetime, and tax-free withdrawals leave more flexibility in retirement tax planning. If you can do both, do both.
Two conditions must both be met for fully tax-free withdrawal of earnings: (1) the account has been open at least 5 tax years, AND (2) you're at least age 59½. The 5-year clock starts on January 1 of the year you made your first contribution — not 5 years from when you contribute. Your direct contributions (not earnings) can be withdrawn anytime, for any reason, without tax or penalty, since you already paid income tax on them.
A workaround for high earners who exceed the income phase-out. You contribute (non-deductible) to a traditional IRA, then immediately convert it to a Roth IRA. The conversion itself isn't subject to income limits. There's no penalty — the IRS has implicitly blessed the strategy — but you must watch the pro-rata rule: if you have pre-tax money in any traditional/SEP/SIMPLE IRA, the conversion is partially taxable. The cleanest setup is no other traditional IRA balances.
Essentially yes — Roth IRAs have no Required Minimum Distributions during the original owner's lifetime, unlike traditional IRAs and pre-SECURE-2.0 401(k)s. You can let the balance compound tax-free for decades and pass it to heirs. Non-spouse beneficiaries must drain the inherited Roth within 10 years of your death (SECURE Act 2019), but those withdrawals are still tax-free. This makes the Roth one of the most flexible estate-planning vehicles available.