Roth IRA Calculator

How It Works

A Roth IRA and a Traditional IRA are the same account with the tax applied at opposite ends. With a Roth, you contribute money you have already paid tax on, and qualified withdrawals in retirement are tax-free — including all the growth. With a Traditional IRA, contributions may be tax-deductible now, but every dollar you withdraw in retirement is taxed as income. The question is not which account is better in general; it is which tax rate is lower — the rate you pay today, or the rate you will pay in retirement.

This calculator compares the two on equal footing. It grows the same annual contribution at the same assumed return for the same number of years, using the future value of an annuity: FV = contribution × ((1 + r)ⁿ − 1) ÷ r, with contributions made at each year-end. The Roth after-tax value is the full account value, because the tax was already paid. The Traditional after-tax value is the account value multiplied by (1 − retirement tax rate), because the whole balance is taxed on withdrawal. The difference between the two is the whole decision in one number.

The 2026 contribution limits come from the IRS (IR-2025-111): $7,500 a year for savers under 50, or $8,600 for savers aged 50 and older, which includes a $1,100 catch-up contribution. The limit covers all of your IRAs combined — you cannot contribute $7,500 to a Roth and another $7,500 to a Traditional in the same year. Contributions also cannot exceed your taxable compensation for the year, and Roth contributions are subject to income phase-outs, so high earners may be limited or ineligible. This calculator does not model income limits; it checks only the dollar limit.

Worked Example

Contribute the full $7,500 a year for 30 years at a 7% average annual return. Total contributions are $7,500 × 30 = $225,000. The account value at retirement is $7,500 × ((1.07³⁰ − 1) ÷ 0.07) = $708,455.90. If your current marginal rate is 22%, the tax paid on Roth contributions over 30 years is $225,000 × 22% = $49,500, and the Roth after-tax value is the full $708,455.90.

The Traditional IRA reaches the same $708,455.90 before tax — but it is all taxed on withdrawal. At a 22% retirement rate, the after-tax value is $708,455.90 × 0.78 = $552,595.60. At a 12% retirement rate it would be $623,441.19, and at 32% it would be $481,750.01. The Roth wins whenever your retirement rate is higher than the rate you paid going in, and the Traditional wins when your retirement rate is lower — the table below shows the crossover clearly.

Assumptions and What This Calculator Leaves Out

• It assumes a fixed annual return every year. Real returns vary, and the order of returns matters — a bad early decade changes the outcome.
• It assumes contributions are made at each year-end. Contributing at the start of each year would give slightly higher values, because each contribution compounds for one extra year.
• It assumes one flat marginal tax rate in retirement. Real retirement income is taxed across brackets, and part of a Traditional withdrawal may fall in a lower bracket.
• It does not model Roth income phase-outs, Traditional deduction limits, the 5-year rule, or early-withdrawal penalties.
• It does not model required minimum distributions (RMDs): Traditional IRAs generally require withdrawals in retirement, while Roth IRAs do not require them during the owner's lifetime.
• It compares equal nominal contributions. A Traditional contribution costs less out of pocket today if it is deductible, so a strict comparison would invest the tax saving too — this calculator shows the simpler equal-contribution view and labels it as such.

After-tax value at retirement for the worked example ($7,500/year, 30 years, 7% return, 22% current rate):

Wait — the Roth wins at every rate in this table, even 12%? That is because the comparison uses equal nominal contributions: the Roth saver's $7,500 is after-tax money, so they effectively put more real money in. If the Traditional saver's $7,500 is deductible, they save $1,650 of tax a year at 22% — and if that saving were invested alongside, the gap would close. The honest rule of thumb stays the same: if your retirement tax rate will be lower than today's, Traditional usually wins; if it will be higher, Roth usually wins.

How to Use This Calculator

Enter your annual contribution — the calculator flags it if it exceeds the 2026 limit of $7,500 ($8,600 at 50+) — then your years until retirement, your expected annual return, and your current and expected retirement marginal tax rates. The results show the account value before tax, the tax paid on Roth contributions, and the after-tax value of each account side by side. Try different retirement tax rates to find the crossover point where the winner changes.

Tips and Practical Advice

Early in your career, when your income — and your tax rate — is at its lowest, the Roth is usually the stronger choice: you pay tax at a low rate now and never again. In your peak earning years, when your marginal rate is at its highest, the Traditional deduction is worth more, and a lower retirement rate makes the tax-later deal attractive. Many savers end up with both, splitting contributions across the two accounts to hedge against unknown future tax rates — a mix gives you flexibility in retirement to draw from the account that costs least in tax each year.

Do not let the tax question delay the saving. The difference between the two accounts is real but modest compared with the difference between saving and not saving: 30 years of $7,500 contributions at 7% turns $225,000 into $708,455.90 either way, and the growth — $483,455.90 of it — dwarfs the tax difference in most scenarios. The contribution limit is also "use it or lose it" each year, so starting now matters more than picking perfectly.

Sources: IRS IR-2025-111 (Nov 13, 2025) and Notice 2025-67 — 2026 IRA limit $7,500, plus $1,100 catch-up at age 50+ ($8,600 total). Last reviewed: 13 November 2026.

Frequently Asked Questions

Related guide: Roth IRA vs 401(k) — Which Is Better? — the 2026 limits and the tax question that decides it.