Project tax-free retirement growth with 2026 IRS limits and compound returns.
How a Roth IRA grows tax-free
A Roth IRA reverses the traditional retirement deal: you contribute after-tax dollars today, and every dollar of growth can be withdrawn tax-free in retirement. A 30-year-old contributing $7,000 a year at 7% could hold over $1 million tax-free by 65.
2026 contribution limits and phaseouts
For 2026: $7,500/year under 50, $8,600 at 50+. Phaseouts: $153,000–$168,000 MAGI (single), $242,000–$252,000 (joint). Above these, use the backdoor Roth strategy.
Roth vs. Traditional IRA
Choose Roth when you expect higher taxes in retirement — typical for young professionals. Earnings are tax-free after 59½ once the account is five years old.
How much can I contribute to a Roth IRA in 2026?
$7,500 under 50, $8,600 at 50+. The limit applies across all IRAs combined and cannot exceed earned income.
What if I earn too much to contribute directly?
Above $168,000 single / $252,000 joint, use the backdoor Roth: nondeductible Traditional IRA contribution converted to Roth.
When can I withdraw from a Roth IRA?
Contributions anytime, tax-free. Earnings tax-free after 59½ with the five-year rule met.
Roth vs. Traditional IRA — which is better?
Roth wins if your tax rate will be higher in retirement; Traditional if you need the deduction today.
Does my 401(k) match count toward the limit?
No. IRA and 401(k) limits are separate; employer matches never count against your IRA limit.
How to use this calculator
Six inputs drive the whole projection. Small changes in the return assumption dominate the result, so spend most of your effort there. Contribution timing matters too: deposits made in January compound for nearly a full year longer than December deposits, so funding early in the year is a free, small boost the calculator assumes when you enter the full annual amount.
- Current age. Your age today. Time is the most powerful input in the model — starting at 25 instead of 35 can nearly double the final balance at the same contribution.
- Retirement age. When you plan to stop contributing and start withdrawing. Sixty-five is the standard benchmark; earlier retirement means fewer compounding years and a smaller balance.
- Annual contribution. What you will invest each year. For 2026 the IRS caps this at $7,500 under age 50 and $8,600 at 50 and older, and the cap applies across all your IRAs combined — so do not model $7,500 here plus another $7,500 elsewhere.
- Expected annual return. Your assumed average yearly growth, net of fees. Seven percent is the commonly used long-run planning figure for a stock-heavy portfolio; use 4–5% if your allocation is conservative. Every point changes the outcome by hundreds of thousands over 30+ years.
- Current balance. What is already in the account today, if anything. Existing money compounds for the full remaining period, so even a small current balance moves the needle.
- Filing status and MAGI (optional). If you enter your modified adjusted gross income, the calculator checks the 2026 Roth phaseout ($153,000–$168,000 single / head of household, $242,000–$252,000 joint) and warns you if your contribution needs reducing — or whether a backdoor Roth is your path.
Understanding your results
- Projected balance at retirement. The headline number: contributions plus compounded growth, all withdrawable tax-free in retirement provided you are 59½ and the five-year rule is met.
- Total contributions. The sum of your out-of-pocket deposits. Comparing this against the projected balance shows how much of the final number is your money versus growth.
- Total growth (earnings). The compounding payoff — the portion the IRS will never tax. In long-horizon scenarios this is typically two to three times the contributions, which is the entire economic case for the Roth.
- Year-by-year projection. The growth curve steepens dramatically in the final decade. That back-loaded shape is why starting early beats contributing more later.
Worked example
A 30-year-old with $0 saved contributes the $7,500 maximum each year until age 65 (35 years), earning an average 7% annual return:
- Total contributions: 35 × $7,500 = $262,500
- Projected tax-free balance at 65: $1,036,777
- Of which tax-free growth: $774,277
Nearly three-quarters of the final million is growth the IRS never touches. Starting at 40 instead of 30 — just ten years later — would cut the outcome roughly in half at the same contribution, which is why the contribution limit matters less than the starting date. From age 50, the $8,600 catch-up limit lets late starters narrow the gap.
Frequently asked questions
Can I contribute to a Roth IRA if I already have a 401(k)?
Yes — the accounts are independent and the limits are separate. You can max out a workplace 401(k) and still contribute the full $7,500 (or $8,600 at 50+) to a Roth IRA in the same year, as long as your income is within the Roth phaseout ranges.
Do I need earned income to contribute?
Yes. Your contribution cannot exceed your earned income for the year — a student with $3,000 of part-time wages can contribute at most $3,000, even though the headline limit is $7,500. Unearned income like dividends or rental income does not qualify.
What happens if I contribute more than the limit?
The excess is hit with a 6% excise tax every year it stays in the account. Fix it by withdrawing the excess (plus any earnings on it) before the tax filing deadline, or by applying it to the next year’s contribution.
Can I convert an existing Traditional IRA to a Roth?
Yes, through a Roth conversion — you pay ordinary income tax on the converted pre-tax amount in the conversion year, and everything after grows tax-free. It is most attractive in low-income years, early retirement gaps, or market dips when the balance (and the tax bill) is temporarily smaller.
Should I pick Roth or Traditional contributions in my workplace 401(k)?
Apply the same logic as the IRA choice: Roth 401(k) contributions suit years when your tax rate is low (early career), while traditional pre-tax contributions suit peak-earning years when the deduction is most valuable. Many savers split between the two to diversify their future tax exposure.
What should I invest in inside the Roth IRA?
The account is a tax wrapper, not an investment — you still choose the holdings. Because withdrawals are tax-free, assets with the highest expected growth (broad stock index funds, for most savers) benefit most from being sheltered here rather than in a taxable account.