See how tax-free Roth IRA growth can turn modest annual contributions into a seven-figure retirement balance.
Use this free Roth IRA planner to estimate your account balance at retirement, the tax-free growth you’ll keep, and how much you’ll save versus investing the same money in a taxable brokerage account.
Direct answers to the most common questions, in plain language. Skim if you're in a hurry; dig deeper below.
Yes, for most earners under the income limits.
A Roth IRA lets your investments grow tax-free for decades, and qualified withdrawals in retirement are not taxed at all. For most people in their 20s, 30s, and 40s, that is the single most valuable account type they have access to.
Around $1.1M if you max it from age 30 to 65 at 7%.
Maxing the $7,500 annual limit from age 30 to 65 at a 7% return produces roughly $1.14M, all of it tax-free. Start at 25 and the same habit lands you closer to $1.6M.
Yes, contributions (not earnings) can come out any time.
The money you contributed is yours to pull out at any age, no tax and no penalty. Earnings are different — they generally need to wait until age 59½ and a 5-year holding period to come out tax-free.
Yes. Single filers phase out at $153K–$168K MAGI in 2026.
Single filers begin phasing out at $153,000 of modified AGI and are fully phased out above $168,000. Married-filing-jointly couples phase out between $242,000 and $252,000. Above those limits, a backdoor Roth is the common workaround.
The mechanics in short answers — no jargon, no upsell.
Unlike a 401(k) or traditional IRA, Roth contributions don’t reduce this year’s tax bill. The trade is simple: pay tax once now, never pay tax on this money again.
Dividends, interest, and capital gains inside a Roth IRA are not taxed each year the way a regular brokerage account is. That alone adds tens of thousands of dollars over a long horizon.
After age 59½, and once the account is at least 5 years old, every dollar you pull out — contributions and a lifetime of growth — comes out tax-free.
A dollar contributed at 25 has 40+ years to compound. A dollar contributed at 55 has 10. The Roth IRA rewards starting early more than almost any other account.
Designed so anyone can model their situation in under a minute, with or without a finance background.
Decades of compounding without the IRS taking a cut each year, or at withdrawal.
Unlike a traditional IRA or 401(k), you are never forced to withdraw in retirement. The account can keep growing.
Contributions can be withdrawn any time for any reason without tax or penalty. Few other retirement accounts allow this.
Nobody knows future tax rates. A Roth locks in today’s rates on this slice of your savings — useful insurance.
Heirs inherit a Roth IRA without owing income tax on withdrawals, only the 10-year distribution timeline.
A single annual contribution, ideally automated, with no quarterly tax forms and no rebalancing required.
Everything you might ask before, during, or after using this tool.
The shortcut: if you expect your tax rate in retirement to be similar to or higher than today, choose Roth. If you expect to be in a meaningfully lower bracket later, traditional has a small edge. For most people in their 20s and 30s, Roth wins because their current bracket is below where they will likely land later.
Above the 2026 income limits ($168K single / $252K MFJ), you cannot contribute directly. The backdoor Roth — contributing to a traditional IRA, then converting to Roth — remains a legal and widely used workaround. Watch the pro-rata rule if you already hold pre-tax IRA money.
Contributions can come out any time, tax- and penalty-free. Earnings withdrawn before age 59½ or before the account is 5 years old are generally taxed and hit with a 10% penalty, with limited exceptions like a first home purchase, qualified education, or certain medical costs.
No. The IRA limit and the 401(k) limit are independent. You can max both in the same year. In fact, pre-tax 401(k) contributions reduce your MAGI, which can help you stay below the Roth income phase-out.
Yes. They have separate contribution limits, separate rules, and complement each other. Many people use the Roth 401(k) for employer-match access and a Roth IRA for the wider investment menu and lower fees.
For tax year 2026, the deadline is April 15, 2027 — the federal tax filing date. Filing a tax extension does not extend the IRA contribution deadline.
For earnings to come out fully tax-free, your first Roth IRA contribution must be at least 5 tax years old, and you must be 59½ or older. The clock starts on January 1 of the year of your first contribution, so a contribution on April 1, 2026 for tax year 2025 starts the clock on January 1, 2025.
The Roth IRA is the best place to hold your highest-growth assets because all that growth comes out tax-free. Many investors keep equity index funds in the Roth and put slower-growing bonds in taxable or traditional accounts.
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The simplest test is your current tax bracket versus your expected bracket in retirement. If you are early in your career, your bracket today is almost certainly lower than where you will land in your peak earning years, which makes paying the tax now a bargain. If you are at the top of your career and expect to retire into a lower bracket, the traditional IRA / 401(k) has a slight edge — but the Roth’s flexibility and no-RMD rules often tip the decision anyway.
Don’t max a Roth IRA if it means skipping the full employer match in your 401(k). The match is a 100% return on day one. Capture it first, then come back to the Roth.
If your tax rate is identical today and in retirement, a Roth and a traditional IRA produce the exact same after-tax balance. The trick is that tax rates almost never stay identical. Roth bets on rates going up (yours, or the country’s). Traditional bets on rates going down. Given how often Congress changes the tax code, having some money in each is the closest thing to a free hedge that exists in personal finance.
A $7,500 contribution at age 25 compounding at 7% for 40 years grows to about $112,000. The same $7,500 contributed at age 55 grows to about $14,700 by 65. Same money, same return — the only difference is time. Every year you delay starting is a year you can never get back, and the early years carry far more weight than the late ones.
Once you are 59½ and your account has been open at least 5 tax years, any amount you withdraw is tax-free and penalty-free. There are no required minimum distributions, ever, during your lifetime. You can leave the account to grow into your 80s and 90s if you don’t need it, then pass it to heirs who inherit the tax-free status under a 10-year distribution timeline.
Two short notes worth reading before you trust any number on this page.
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