Are you curious about how much money you need to save in your Roth IRA for retirement? Contributing to a Roth IRA can make a massive difference in your retirement savings because your investments can grow tax-free. Find out how much you can save for retirement with our Roth IRA calculator, whether you have one already or plan to set one up soon. We also go over some of our other favorite Roth IRA calculators.
Free Roth IRA calculator
We have created a free Roth IRA calculator to help you estimate how much money you can save for retirement. It takes into account factors such as your age, annual income, contributions, and expected rate of return on your investments.
How to use our free Roth IRA calculator
Our Roth IRA calculator is easy to use and can be helpful in planning for retirement. It will help you determine how much you need to save each year to reach your goals.
It assumes that your income does not limit your ability to contribute. Check the Roth IRA income limits each year to make sure that you still qualify.
Please keep in mind that the Roth IRA calculator estimates are just that – estimates – and that actual results may vary based on market conditions and other factors.
Definitions:
- Your current age
Your age right now - Anticipated Retirement Age
This is the age you plan to retire. - Current Retirement Savings
The current balance of your Roth IRA. - Monthly amount invested
This is the amount that you contribute to your Roth IRA every month. For 2023, the maximum annual contribution is $6,500. This averages out to $541.67 per month. The contribution amount may increase every year. If you are 50 and older, you can make an additional catch-up contribution of $1,000. 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. There are income limits for a Roth IRA but for the purposes of this calculator, we assume your income is under the limits. - Annual interest rate (ROI)
The Roth IRA calculator defaults to a 5.5% rate of return, which can be adjusted to reflect the expected annual return of your investments. It is important to remember that these scenarios are hypothetical, 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. - Available at retirement
This is the total value of your Roth IRA at your retirement.
Please note that these retirement calculators are not intended to provide or replace specific financial advice. The accuracy or applicability of these statistics may vary depending on your specific circumstances. The calculation does not promise future results, and more in-depth analysis may be required. We encourage you to consult with a financial advisor who will be able to create a personalized financial plan according to your situation. This Roth IRA calculator is intended for use by US residents only.
What are the Roth IRA income limits for 2023?
| If your filing status is... | And your modified AGI is... | Then you can contribute... |
|---|---|---|
| married filing jointly or qualifying widow(er) | < $218,000 | up to the limit |
| married filing jointly or qualifying widow(er) | > $218,000 but < $228,000 | a reduced amount |
| married filing jointly or qualifying widow(er) | > $228,000 | zero |
| married filing separately and you lived with your spouse at any time during the year | < $10,000 | a reduced amount |
| married filing separately and you lived with your spouse at any time during the year | > $10,000 | zero |
| single, head of household, or married filing separately and you did not live with your spouse at any time during the year | < $138,000 | up to the limit |
| single, head of household, or married filing separately and you did not live with your spouse at any time during the year | > $138,000 but < $153,000 | a reduced amount |
| single, head of household, or married filing separately and you did not live with your spouse at any time during the year | > $153,000 | zero |
Which Roth IRA calculator is best?
I am a little biased and think that our Roth IRA is pretty great. However, I did research other Roth IRA calculators that may also be useful to you. I googled the term “Roth IRA calculator,” and the top three search results that appeared were calculators by Bankrate, Nerdwallet, and Thrivent. Let’s look closely at each.
Also just a quick note – Roth IRA calculators can be useful but it’s best to consult with your financial advisor to make sure that you are on track for retirement.
1) Bankrate’s Roth IRA Calculator
It sent me to a page where I was able to enter the following assumptions:
- $0 starting balance (better late than never)
- Annual contributions: $5,500 (and increasing future contributions to the maximum allowed; it would not allow me to put $6,500, which is the current Roth IRA annual contribution limit)
- Current age: 33
- Age of retirement: 65
- Expected rate of return: 6% (stocks have historically returned around 10% per year, but we believe given the current stock market valuations, a 6% return is more reasonable for an aggressive portfolio)
- Marginal tax rate: 25% (assuming post-2025 tax bracket)
The Bankrate’s Roth IRA calculator tells us that if we contribute yearly to a Roth IRA based on the above assumptions, our money could be worth over $550,000 at age 65. That’s the power of compounding. Overall, that generates tax savings of close to $140,000. That’s the power of a Roth IRA.
However, it did not allow me to put in the maximum annual Roth IRA contribution for 2023. It looks like this calculator has not been updated in a few years. Therefore the results will not be accurate.
2) Nerdwallet’s Roth IRA Calculator
Nerdwallet’s calculator does a good job of incorporating the annual salary limits for a Roth IRA. For example, I put in that my gross salary is $140,000 as a single filer. It then said that I can only contribute $5,633. This is accurate because a $140,000 MAGI is already in the phase-out range.
3) Thrivent Roth IRA Calculator
This calculator looks exactly the same as Bankrate’s Roth IRA calculator. It did allow me to put in the annual contribution of $6,500 for 2023. However, this doesn’t calculate how much I can actually put into a Roth IRA if my income is $140,000. It’s a great calculator if you know the exact amount you can contribute every year.
Common Roth IRA retirement calculation questions:
How much will a Roth IRA grow in 10 years?
There are several factors that will affect Roth IRA growth in 10 years, such as the initial investment amount, the annual contribution, the rate of return, and any fees or expenses associated with the account.
What’s the average Roth IRA interest rate?
Roth IRAs aren’t investments so they don’t pay interest or earn interest. However, the investments held within a Roth IRA may earn a return over time, depending on how you invest your money.
Historically, a Roth IRA invested in the stock market has delivered between 7% and 10% in average annual returns. It’s important to remember that you may earn more or less than this.
What is the annual Roth IRA contribution limit for 2023?
The annual contribution for a Roth IRA for 2023 is $6,500. An additional catch-up contribution of up to $1,000 is allowed per year for people 50 or older. Those contribution limits apply to both Roth and traditional IRA accounts.
Who can contribute to a Roth IRA?
Anyone who earns an income in the current tax year and meets the income restrictions below can contribute to a Roth IRA.
What is the minimum amount to open a Roth IRA?
The IRS does not require a minimum amount to open a Roth IRA.
What happens if you put more than $6,500 into a Roth IRA?
If you put more than $6,500 (the 2023 annual contribution amount) into a Roth IRA then you will be subject to a 6% penalty tax on the excess amount every year it goes uncorrected. You can file a withdrawal of excess contribution form to correct this.
Is 35 too old to start investing?
There is never a wrong time to start investing. If you start investing at 35, you still have many years of compounding interest ahead.
Is it worth opening a Roth IRA at 30?
Yes, it can be worthwhile to open a Roth IRA at age 30. If the annual contribution amount remained at $6,500 then you probably won’t end up with over $1 million by the time you reach retirement. However, it is still money that you can draw on tax-free in retirement. The earlier that you can start saving for retirement, the better.
At what age does a Roth IRA not make sense?
You are never too old to fund a Roth IRA. However, there are things to consider before opening a Roth IRA later in life so it’s best to consult your financial advisor.
At what age can you retire with 1 million dollars?
The age at which you can retire with 1 million dollars depends on a number of factors, such as how you live, what you want to accomplish in retirement, and how much you expect to spend in retirement. Additionally, the rate of return on your investments, inflation, taxes, and other variables, can also impact the value of your savings.
Retirement planning is a complex process and it’s best to consult with your financial advisor. There is no one-size-fits-all answer.
How can I make my Roth IRA grow faster?
The best way to make your Roth IRA grow faster is to start saving as early as possible. Make your contributions early in the year to get better compounding effects.
What is a good monthly retirement income?
Ideally, you may be able to live comfortably in retirement with an income of about 80% of your pre-retirement income.
Should I do a Roth IRA in a lump sum or monthly?
Whether you do a lump sum or monthly contribution is up to you. If you make an annual lump sum contribution at the start of the year then you will benefit from compounding interest for that year. However, if that is not a realistic option for you, then setting up automatic monthly payments is a great way to ensure that you stay on track for your retirement goals. What matters most is that you are saving for retirement.
When can I withdraw from my Roth IRA?
You can withdraw your Roth IRA contributions at any time. However, you cannot withdraw any of your Roth IRA earnings until you turn 59 ½ and have had your Roth IRA open for at least five years. If you withdraw your earnings before then, you may have to pay a 10% penalty and taxes. There are some instances where you can avoid taxes on earnings or the 10% penalty such as the first time that you purchase a home.
Do I have to make withdrawals from my Roth IRA?
No. Roth IRAs are not subject to required minimum distributions (RMDs) meaning you don’t have to make any mandatory withdrawals.
Can I convert my traditional IRA to a Roth IRA?
Yes, you can convert your traditional IRA to a Roth IRA. If your income exceeds the limits for a Roth IRA in 2023, then you can do a Roth conversion. This is called a backdoor Roth IRA.
Use a Roth IRA calculator in 2023
A Roth IRA calculator can be a great free tool to help you get an estimate of what your Roth IRA retirement savings will be. If you want a more accurate projection, then it’s best to consult with your financial advisor. If you want help with your finances and are interested in having a comprehensive financial plan, feel free to schedule a discovery call with one of our financial advisors today!
Alvin Carlos, CFP®, CFA is an investment advisor and fee-only financial planner, in Washington, D.C that works with clients across the country. He has a Master’s degree in International Relations from SAIS-Johns Hopkins. Alvin is a partner of District Capital, a financial planning firm designed to help professionals in their 30s and 40s achieve their financial goals through smart investing, reducing taxes, retirement planning, and maximizing their money. Schedule a free discovery call to learn how we can help elevate your finances.
