What are the 2024 Roth IRA contribution limits?

$7,000 per year ($8,000 if you're 50 or older). This is the total limit across all your IRAs — you can't contribute $7,000 to a Roth and $7,000 to a Traditional in the same year. Income phase-outs: single filers phase out at $146,000–$161,000 MAGI; married filing jointly at $230,000–$240,000.

What is the backdoor Roth IRA?

If your income exceeds the Roth contribution limit, contribute to a non-deductible Traditional IRA (no income limit), then immediately convert it to Roth. Done correctly with no other Traditional IRA balances, this is tax-free. The 'pro-rata rule' applies if you have existing pre-tax Traditional IRA balances — consult a tax advisor before executing.

Can I withdraw Roth IRA contributions early?

Yes — Roth IRA contributions (not earnings) can be withdrawn at any time, at any age, with no taxes or penalties. Only the investment gains are subject to the 59½ rule. This flexibility makes a Roth a useful emergency fund backup — though using it that way sacrifices tax-free compound growth.

Does a Roth IRA have required minimum distributions?

No — Roth IRAs have no RMDs during the owner's lifetime. Traditional IRAs and 401(k)s require you to start withdrawing a set minimum at age 73, whether you need the money or not. This makes Roth accounts valuable for estate planning and for people who don't expect to need the full balance early in retirement.

Can I have both a 401(k) and a Roth IRA?

Yes — they have completely separate contribution limits. Maxing your Roth IRA ($7,000) doesn't reduce your 401(k) limit ($23,000). A common optimal strategy: contribute enough to the 401(k) to capture the full employer match, then max the Roth IRA, then return to the 401(k) if additional savings capacity remains.

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Roth IRA Calculator – Roth vs. Traditional IRA

Roth vs Traditional IRA — which is better?

What This Does

Roth vs. Traditional IRA is the most commonly misunderstood retirement question. The answer isn't "Roth is always better" — it depends entirely on your current tax rate versus your expected tax rate in retirement. This calculator runs the comparison so you can see the actual numbers. Both accounts grow the same way and have the same contribution limits. The difference is when you pay taxes: Traditional contributions are pre-tax (you deduct them now, pay taxes on withdrawals later), Roth contributions are after-tax (you pay taxes now, but all growth and withdrawals are forever tax-free). If your tax rate is higher today than it will be in retirement, Traditional wins — you defer taxes from a high bracket to a lower one. If your rate will be equal or higher in retirement, Roth wins — you pay now at the lower rate and never pay again. Most people in early career years are in a lower tax bracket than they'll be in peak earning years — which is why Roth is almost always the right choice when you're starting out. The calculator also checks 2024 Roth income limits and shows the break-even tax rate: the retirement tax rate at which both accounts produce identical results.

Assumptions

·Assumes the same dollar contribution in both scenarios (Roth after-tax vs. Traditional pre-tax of the same amount)
·Does not adjust Traditional comparison for the tax savings on contribution (a more rigorous analysis would invest the tax savings separately)
·Roth income phase-out: single filers $146,000–$161,000 MAGI; married filing jointly $230,000–$240,000 in 2024
·RMD impact not modeled — Traditional IRAs require minimum distributions at 73; Roth IRAs have no RMDs
·Assumes returns compound annually at the rate entered

How It's Calculated

Traditional IRA after-tax value at retirement: = [Principal × (1 + r)^n] × (1 – retirement tax rate) Roth IRA after-tax value at retirement: = [Principal × (1 – current tax rate)] × (1 + r)^n → simplified: Principal already invested after-tax, so full value is tax-free at withdrawal. Break-even tax rate (the retirement rate at which both are equal): = 1 – [(1 – current tax rate) × (1 + r)^n] / [(1 + r)^n] = Current tax rate (they're equal when tax rates don't change) Key insight: if you contribute the SAME after-tax dollar amount to both, Roth always wins slightly (because Traditional must be grossed up to equal Roth's contribution). In practice, the choice is about whether your tax rate will be higher or lower in retirement.

When Should You Use This?

→Early career (under 35) — Roth is almost always the right choice at low income levels
→Comparing job offers with different benefit structures — model which IRA type pairs best
→Planning for retirement income — see whether tax-free Roth income reduces your RMD burden
→Checking if you're near the Roth income limit — phase-out triggers at $146,000 single/$230,000 MFJ in 2024
→Deciding whether to convert Traditional IRA assets to Roth (Roth conversion strategy)

Worked Examples

Example 1: 28-year-old in 22% bracket expecting lower retirement rate

Inputs: Age: 28 · Contribution: $7,000/yr · Current bracket: 22% · Expected retirement bracket: 12% · Return: 7% · Years to retirement: 37

Result: Roth at retirement: $1,165,000 (tax-free) | Traditional at retirement: $1,165,000 before tax → $1,025,000 after 12% tax · Traditional wins by $140,000

When your retirement tax rate (12%) is lower than today's rate (22%), Traditional wins — you defer taxes from a higher rate to a lower one. This is the classic case for Traditional: high earners in peak years saving for a more modest retirement income.

Example 2: 24-year-old in 12% bracket expecting higher retirement rate

Inputs: Age: 24 · Contribution: $7,000/yr · Current bracket: 12% · Expected retirement bracket: 22% · Return: 7% · Years to retirement: 41

Result: Roth at retirement: $1,460,000 (tax-free) | Traditional at retirement: $1,460,000 before tax → $1,139,000 after 22% tax · Roth wins by $321,000

At 24 in a 12% bracket, Roth is almost always the right choice. You lock in the lowest rate you'll likely ever see, and all growth — potentially over $1 million — is permanently tax-free.

Roth IRA Calculator

Roth vs Traditional · Tax Rate Sensitivity · Break-Even Analysis

Results update in real time as you adjust any input.

Your Profile

Current Age

Retirement Age

Filing Status

MAGI

Phase-out: $146k–$161k

Contribution & Balance

Annual Contribution

2024 max: $7,000 ($8,000 if 50+)

Current IRA Balance

Annual Return

S&P 500 avg ~7% real, ~10% nominal

Tax Rates — The Core Decision Variable

Current Marginal Tax Rate

Roth: pay tax NOW at this rate

Estimated Retirement Tax Rate

Traditional: pay tax LATER at this rate

About This Calculator

This Roth IRA calculator uses the future value formula FV = PV x (1+r)^n + PMT x ((1+r)^n - 1) / r. For an apples-to-apples comparison, Roth contribution is taken as-is (after-tax dollars), and the equivalent Traditional contribution is grossed up to pre-tax: Roth / (1 - current tax rate). Roth balance is always tax-free at withdrawal. Traditional after-tax value = traditional balance x (1 - retirement tax rate). Break-even rate = 1 - (Roth balance / Traditional pre-tax balance). Roth eligibility phase-out (2024): single $146k-$161k MAGI, married $230k-$240k MAGI. All results update in real time across all nine inputs.

The Comparison tab renders a line chart of Roth after-tax (emerald, flat because tax-free) vs Traditional after-tax (indigo, declining as retirement tax rises) across 0%-40% retirement tax rates — the two lines cross at the break-even rate. A vertical ReferenceLine marks your current estimated rate. A bar chart shows the Roth advantage (positive emerald = Roth wins, negative red = Traditional wins) at each retirement tax rate, crossing zero at break-even. The Growth tab renders a dual-area chart of Roth (emerald gradient) vs Traditional (indigo gradient) after-tax balances growing from current age to retirement age. The Scenarios tab renders a grouped bar chart (side-by-side Roth and Traditional bars) at 3-4 contribution levels, with current contribution highlighted at full opacity.

Roth score (0-100): tax rate delta (35 pts for higher retirement rate, 25 for equal, 10 for lower), years to retirement (35 pts for 30+ years, 28 for 20+, 18 for 10+, 8 for under 10), eligibility (20 pts fully eligible, 12 pts partial, 0 pts ineligible), existing balance bonus (10 pts). Dynamic accent: emerald (Roth is Ideal 80+), indigo (Roth Likely Better 60+), amber (Roth Worth Considering 40+), orange (Situation Specific 20+), red (Traditional May Win). Three auto-trigger alerts: income ineligibility with backdoor note, partial eligibility with reduced limit, contribution over IRS limit warning.

Results are estimates only and do not constitute financial, tax, or legal advice. Always consult a qualified professional before making financial decisions.

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Common Mistakes to Avoid

✕Assuming Roth is always better — the math depends on current vs. future tax rates, not a rule of thumb
✕Exceeding the income limit without using the backdoor Roth — direct Roth contributions are disallowed above the phase-out; the backdoor is a legal workaround
✕Withdrawing Roth earnings before 59½ — contributions can be withdrawn anytime tax- and penalty-free, but earnings cannot without penalty
✕Ignoring RMDs in Traditional IRA planning — required minimum distributions at 73 can force taxable income whether you need the money or not
✕Not contributing because you're unsure which is better — contributing to either is far better than not contributing at all

Frequently Asked Questions