Roth IRA Calculator

2024 limit: $7,000 (under 50), $8,000 (50 or older)

Total Balance at Retirement

$0

Nominal Value
Total Contributions

$0

Your Investment
Tax-Free Growth

$0

Tax Savings
Real Value at Retirement

$0

Inflation Adjusted
Tax Information

Current Tax Bracket

22.0%

Effective Tax Rate

13.8%

Growth Projection
Year by Year Breakdown
Age Year Beginning Balance Contribution Withdrawal Interest Earned Ending Balance Real Value
30 2024 $10,000 +$6,000 $0 +$700 $16,700 $16,293
33 2027 $31,540 +$6,000 $0 +$2,208 $39,748 $36,161
34 2028 $39,748 +$6,000 $0 +$2,782 $48,530 $43,217
35 2029 $48,530 +$6,000 $0 +$3,397 $57,927 $50,513
36 2030 $57,927 +$6,000 $0 +$4,055 $67,982 $58,060
37 2031 $67,982 +$6,000 $0 +$4,759 $78,741 $65,871

Understanding Your Roth IRA Investment

How Roth IRA Works

A Roth IRA is funded with after-tax dollars, meaning you've already paid taxes on the money you contribute. Here's what makes it special:

  • Tax-Free Growth: Your investments grow tax-free within the account
  • Tax-Free Withdrawals: Qualified distributions are completely tax-free
  • No RMDs: No required minimum distributions during your lifetime
Contribution Rules for 2024
Filing Status Modified AGI Contribution Limit
Single or Head of Household < $146,000 Full amount
$146,000 - $161,000 Reduced amount
≥ $161,000 Not eligible
Qualified Distribution Rules

A qualified distribution from a Roth IRA meets these criteria:

  1. The account has been open for at least 5 years, AND
  2. One of the following conditions is met:
    • Age 59½ or older
    • Disability
    • Death (distribution to beneficiary)
    • First-time home purchase (up to $10,000)
Investment Considerations
  • Return Rate:

    Historical stock market returns have averaged around 7-10% annually before inflation.

  • Inflation:

    The Federal Reserve targets a 2% annual inflation rate.

  • Risk Tolerance:

    Consider your age and retirement timeline when choosing investments.

Early Withdrawal Exceptions

The 10% early withdrawal penalty may be waived for:

  • First-time home purchase (up to $10,000)
  • Qualified education expenses
  • Birth or adoption expenses (up to $5,000)
  • Unreimbursed medical expenses
  • Health insurance premiums while unemployed
  • Disability
  • Inheritance by beneficiary