Roth IRA Calculator

Creating a Roth IRA can make a big difference in your retirement savings. There is no tax deduction for contributions made to a Roth IRA, however all future earnings are sheltered from taxes, under current tax laws. The Roth IRA can provide truly tax-free growth.

At retirement your IRA balance could be worth ROTH_TOTAL.

An ordinary taxable savings account would be worth TOTAL_TAXABLE. This is a DIFFERENCE_AT_RETIRE difference. **GRAPH**
Results Summary
Starting balanceSTARTING_BALANCE
Maximum contribution for 2014*CONTRIBUTE_MAXIMUM
Actual contribution for 2014*ANNUAL_CONTRIBUTIONMSG_CONTRIBUTE_LBL
Total contributionsTOTAL_CONTRIBUTIONS
IRA Total at RetirementROTH_TOTAL
Taxable savings accountTOTAL_TAXABLE
DifferenceDIFFERENCE_AT_RETIRE

*The annual maximum contribution for 2014 is $5,500. If you are age 50 or over, a "catch-up" provision allows you to contribute even more to your IRA. The "catch-up" for individuals age 50 or over is $1,000 for 2014. The maximum contributions and "catch-up" provisions are automatically included in your results.

In 2014, for single filers, Roth IRA contributions are phased out for incomes between $114,00 and $129,000. For married couples filing jointly, IRA contributions are phased out for incomes between $181,000 and $191,000. For the purposes of this calculator, we assume you are not Married filing separately, which has a phase-out range of $0-$10,000.

Input Summary
Annual contributionANNUAL_CONTRIBUTION
Starting balanceSTARTING_BALANCE
Current ageCURRENT_AGE
Age of retirementAGE_OF_RETIREMENT
Years until retirementYEARS_UNTIL_RETIREMENT
Expected rate of returnRATE_OF_RETURN
Marginal tax rateMARGINAL_TAX_RATE

Roth IRA Balances by year

**REPEATING GROUP**

Roth IRA Calculator Definitions

Starting balance
The current balance of your Roth IRA.
Annual contribution
The amount you will contribute to your Roth IRA each year. This calculator assumes that you make your contribution at the beginning of each year. For 2014, the maximum annual IRA contribution of $5,500 is unchanged from 2013. It is important to note that this is the maximum total contributed to all of your IRA accounts. The contribution limit increases with inflation in $500 increments. An annual change to the contribution limit only occurs if the cumulative effect of inflation since the last adjustment is $500 or more.

If you are 50 or older you can make an additional 'catch-up' contribution of $1,000. The 'catch-up' contribution amount of $1,000 remains unchanged for 2014. In order to qualify for the 'catch-up' contribution, you must turn 50 by the end of the year in which you are making the contribution.

It is important to note that Roth IRA contributions are limited for higher incomes. If your income falls in a 'phase-out' range you are allowed only a prorated Roth IRA contribution. If your income exceeds the phase-out range, you do not qualify for any Roth IRA contribution. For the purposes of this calculator, we assume that your income does not limit your ability to contribute to a Roth IRA. The table below summarizes the income 'phase-out' ranges for Roth IRAs.

Tax filing status2014 Income Phase-Out Range
Married filing jointly or head of household$181,000 to $191,000
Single$114,000 to $129,000
Married filing separately*$0 to $10,000
*For the purposes of this calculator, we assume you are not Married filing separately and contributing to a Roth IRA.

Starting in 2010 high income individuals will have the option to make non-deductible traditional IRA contributions and then immediately convert them to a Roth IRA. This can effectively eliminate the income phase-out for Roth IRA contributions.

Current age
Your current age.
Age of retirement
Age you wish to retire. This calculator assumes that the year you retire, you do not make any contributions to your IRA. So if you retire at age 65, your last contribution is assumed to have happened when you were actually 64.
Expected rate of return
The annual rate of return for your IRA. This calculator assumes that your return is compounded annually and your contributions are made at the beginning of each year. The actual rate of return is largely dependent on the types of investments you select. The S&P 500® for the 10 years ending Dec. 31st, 2013 had an annual compounded rate of return of 7.3%, including reinvestment of dividends. From January 1970 through the end of 2013, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.6% (source: www.standardandpoors.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a bank may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.

It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that funds and/or investment companies may charge.

Marginal tax rate
The marginal tax rate you expect to pay on your taxable investments. Use the table below to assist you in estimating your Federal 2014 tax rate.
Filing Status and Income Tax Rates 2014*
Tax RateMarried Filing Jointly or Qualified Widow(er)SingleHead of HouseholdMarried Filing Separately
10%$0 - $18,150$0 - $9,075$0 - $12,950$0 - $9,075
15%$18,150 - $73,800$9,075 - $36,900$12,950 - $49,400$9,075 - $36,900
25%$73,800 - $148,850$36,900 - $89,350$49,400 - $127,550$36,900 - $74,425
28%$148,850 - $226,850$89,350 - $186,350$127,550 - $206,600$74,425 - $113,425
33%$226,850 - $405,100$186,350 - $405,100$206,600 - $405,100$113,425 - $202,550
35%$405,100 - $457,600$405,100 - $406,750$405,100 - $432,200$202,550 - $228,800
39.6%over $457,600over $406,750over $432,200over $228,800
*Caution: Do not use these tax rate schedules to figure 2013 taxes. Use only to figure 2014 estimates. Source: 2014 tax brackets http://www.irs.gov
Total contributions
The total amount contributed to this IRA.
Maximize contributions
Check this box to contribute the maximum allowed to your account each year. This includes the additional catch-up contribution available when you are age 50 or over.
Total taxable savings
The total amount you would have accumulated by retirement in a taxable savings account.
Roth total at retirement
Total value in your Roth IRA at your retirement. To take any distributions that include earnings that are tax free, the Roth IRA must be opened for 5 tax years. Eligible tax free distributions include those taken for death or disability, after age 59-1/2, or for a first time home purchase.


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