Roth IRA Calculator
A Roth is funded with money you have already paid tax on, and everything after that — growth and withdrawals — is tax-free. The comparison below shows what the same balance would be worth in a traditional account, where withdrawals are taxed.
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Paying the tax now, on purpose
A Roth costs you more today: the contribution comes from money already taxed. In exchange, decades of growth are never taxed at all. On a balance that has multiplied several times over, the tax that never falls due on the growth is far larger than the tax paid on the contributions.
When a Roth is clearly right
Early career, when your tax rate is likely lower than it will be later. Anyone expecting substantial retirement income from other sources. And anyone who values certainty: a Roth removes future tax-rate risk entirely, which is worth something on its own given how often tax law changes.
Two advantages beyond the tax rate
Roth IRAs have no required minimum distributions during the original owner's lifetime, so the balance can keep compounding untouched. And contributions — though not growth — can generally be withdrawn at any time without tax or penalty, which gives a Roth a flexibility a traditional account does not have.
Income limits, and the effective cap
Direct Roth contributions phase out above certain income levels. Note also that the contribution limit is the same nominal number for both account types, which quietly favours the Roth: contributing the maximum to a Roth shelters more real value, because those dollars are already net of tax.
Frequently asked questions
Roth or traditional?
Roth if you expect your retirement tax rate to be the same or higher than today; traditional if you expect it to be lower. The verdict above reflects the rates you entered, but the difference is often smaller than the value of simply contributing consistently.
Can I withdraw from a Roth early?
Contributions can generally be withdrawn at any time without tax or penalty, since tax was already paid. Growth withdrawn before the qualifying conditions are met is normally taxable and penalised.
What if I earn too much to contribute?
Direct contributions phase out above an income threshold. There are other routes into a Roth, but they interact with existing pre-tax IRA balances in ways worth getting advice on.
Does a Roth have required minimum distributions?
Not for the original owner during their lifetime, which is one of its structural advantages over a traditional IRA. Inherited accounts follow different rules.