Transparent method
The formula
Worked example
Example inputs
How to interpret the result
Roth IRA eligibility phases out above specific income thresholds that change periodically, so contributing the full standard amount without checking current income against the current-year threshold can result in an excess contribution that carries its own separate penalty if it isn't identified and corrected before the tax deadline.
Before you rely on it
What to check
Confirm current income against the current tax year's official phase-out range before assuming the full standard contribution amount is actually allowed.
The common error
Where people go wrong with roth IRA contribution calculator
Contributing the full standard Roth IRA amount without checking income against the current year's phase-out thresholds. An excess contribution above what's actually allowed carries its own penalty if it isn't caught and corrected in time.
Sensitivity evidence
How expected annual return changes the projected roth IRA value
| Expected annual return | Projected Roth IRA value | Current after-tax cash cost | Projected investment growth |
|---|---|---|---|
| 5.0% | $23,704 | $7,000 | $16,704 |
| 6.0% | $30,043 | $7,000 | $23,043 |
| 7.0%worked example | $37,992 | $7,000 | $30,992 |
| 8.0% | $47,939 | $7,000 | $40,939 |
| 9.0% | $60,362 | $7,000 | $53,362 |
Every input, tested
Which input moves the projected roth IRA value most
| Input | Tested from | To | Projected Roth IRA value at each end | Swing |
|---|---|---|---|---|
| Years invested | 19.0 years | 31.0 years | $25,316 to $57,016 | $31,700 (83%) |
| Expected annual return | 6.0% | 8.0% | $30,043 to $47,939 | $17,896 (47%) |
| Allowed Roth IRA contribution | $6,300 | $7,700 | $34,193 to $41,791 | $7,598 (20%) |
| Current marginal tax rate | 22.0% | 26.0% | $37,992 to $37,992 | none |
Two variables at once
Projected Roth IRA value by expected annual return and allowed roth IRA contribution
| Expected annual return \ Allowed Roth IRA contribution | $5,600 | $7,000 | $8,400 |
|---|---|---|---|
| 5.0% | $18,964 | $23,704 | $28,445 |
| 6.0% | $24,034 | $30,043 | $36,052 |
| 7.0% | $30,394 | $37,992 | $45,590 |
| 8.0% | $38,351 | $47,939 | $57,527 |
| 9.0% | $48,289 | $60,362 | $72,434 |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Allowed Roth IRA contribution | $7,000 |
| Expected annual return | 7.0% |
| Years invested | 25.0 years |
| Current marginal tax rate | 24.0% |
| Projected Roth IRA value | $37,992 |
| Current after-tax cash cost | $7,000 |
| Projected investment growth | $30,992 |
Where the inputs come from
Allowed Roth IRA contribution is the amount you are eligible to put in this year, capped at the IRS limit and at your earned income, and reduced or eliminated if your modified adjusted gross income is above the phase-out range for your filing status. Enter your expected return, the years until you will withdraw and your current marginal rate, used to show the after-tax cash cost. Check current eligibility limits at the IRS website before contributing.
When the result stops applying
You need earned income to contribute, and high earners may not be eligible for direct contributions. Qualified earnings withdrawals require the account to be five years old and you to be 59½ or meet another exception. The projection is for a single contribution, not annual ones, and the return is assumed steady.
What to compare it with
Compare with a traditional IRA on the traditional versus Roth calculator and the deduction page. The backdoor Roth page covers high earners, and the Roth conversion calculator covers moving existing money. The IRA growth calculator projects regular annual contributions. If your income is close to the eligibility limit, confirm your modified adjusted gross income before contributing, since an excess contribution is penalized each year it stays in the account.
People also ask
Frequently asked questions
Who can contribute to a Roth IRA?
Anyone with earned income whose modified adjusted gross income is below the annual phase-out range for their filing status. Above it, contributions are reduced or barred.
Can I withdraw contributions anytime?
Yes, the amounts you contributed can come out tax and penalty free at any age. Earnings are taxed and penalized if withdrawn early, apart from exceptions.
What is the five-year rule?
Earnings can be withdrawn tax free only if the Roth has been open for at least five years and you are 59½ or older, disabled, or meet another qualifying reason.