Roth IRA Calculator
A Roth IRA is an individual retirement account where contributions are made with after-tax dollars. All growth and withdrawals after age 59½ are completely tax-free. Unlike traditional IRAs, there are no required minimum distributions during the account holder's lifetime.
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Tip: Young workers in low tax brackets should almost always choose Roth over traditional — they pay taxes now at low rates and enjoy decades of tax-free growth.
- 1Contribute after-tax money up to the annual limit
- 2Money grows completely tax-free
- 3Qualified withdrawals after 59½ are 100% tax-free (including all gains)
- 4Income limits apply: phase-out starts at $146,000 (single) or $230,000 (married) for 2024
$7,000/year from age 25 to 65 at 7% return=~$1.5 million tax-freeOnly $280,000 contributed — $1.2M is tax-free growth
| Feature | Roth IRA | Traditional IRA |
|---|---|---|
| Contributions | After-tax | Pre-tax (usually) |
| Growth | Tax-free | Tax-deferred |
| Withdrawals | Tax-free after 59½ | Taxed as income |
| RMDs | None during lifetime | Required at age 73 |
| 2024 Limit | $7,000 ($8,000 if 50+) | $7,000 ($8,000 if 50+) |
| Income limits | Yes (phase-out applies) | No income limit for contribution |
| Best for | Expect higher tax rate in retirement | Expect lower tax rate in retirement |
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Fun Fact
The Roth IRA was created by the Taxpayer Relief Act of 1997 and named after its chief legislative sponsor, Senator William Roth of Delaware.
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