Roth IRA Calculator: Calculate Your 2023 Contribution

Roth IRA calculator will automatically determine how much you are entitled to contribute to Roth IRA this year according to your present age, tax-filing status, and MAGI. If you want to contribute less, you may reduce your donation amount. (The Internal Revenue Service has established income thresholds that must be met for individuals to be eligible for Roth IRAs. Whenever you reach one of these income thresholds, your maximum yearly contribution will continue to decrease until it is removed.

The variables you input into the Roth IRA conversion calculator—your total intended yearly contribution, your present age and retirement age, and the rate of return—determine your Roth IRA amount at retirement. The Roth IRA calculator uses a 2% yearly income growth rate. There is no assumption of inflation.

The default rate of return for the Roth IRA calculator is 6%, but you may change it to reflect the yearly return that you anticipate from your assets. In the Advanced areas, you may add catch-up contributions. If you are under 50, calculator will start factoring in catch-up contribution amount when you are 50 years old, and it will continue to do so in the following years.

Your Roth IRA contribution limit, projected tax savings, the amount needed for retirement, and the amount Roth IRA will contribute to retirement savings will all be provided by IRA calculator Roth in seconds. The projected amount of money saved on taxes is derived from comparing the benefits of investing in a traditional taxable account instead of a Roth IRA. Saving for retirement with a Roth IRA provides tax benefits over investments in a regular taxable brokerage account.

Key details about Roth IRAs

Individual retirement accounts that provide favorable tax treatment are known as Roth IRAs. Roth IRA contributions are made after taxes, and any earnings on those contributions are tax-free. When you take money out of your Roth IRA during retirement, you won't have to pay any income tax if you follow the criteria for Roth IRA distributions.

This sharply contrasts the tax situation of a regular IRA and a 401(k), in which contributions are tax deductible. Still, payouts in retirement are subject to income taxation. A Roth IRA is an account through which you may purchase investments rather than an investment in and of itself. Most Roth IRAs will provide various investment options, such as individual stocks, bonds, and mutual funds. Your level of comfort with risk and the available time should guide your choice of assets.

Roth IRA annual contribution limits

The annual contribution limit is the most money that may be put into a Roth IRA in a given year. The maximum amount that may be contributed to a Roth IRA each year is $6,000 in 2022 and $6,500 in 2023. Those 50 or older are eligible for an extra catch-up payment of up to $1,000 yearly. These restrictions apply to both Roth and traditional IRA accounts; if you have both, you may contribute a maximum of $6,000 in 2022 ($7,000 if you're 50 or older) and $6,500 in 2023 ($7,500 if you're 50 or older).

Limits on Roth IRA income for 2022 and 2023

Roth IRA income limit is amount of money you may earn in income before the Roth IRA maximum yearly contribution starts to phase down. The opportunity to contribute to Roth IRA is fully abolished at certain income levels.

Age of retirement

Your retirement age is the age at which you intend to retire. Depending on the year you were born, the full retirement age might vary anywhere from 65 to 67.

Expected rate of return

Amount of money your investments in your Roth IRA earn over a year is known as the annual rate of return. The default rate of return on the Roth IRA calculator is 6%, but this number has to be changed to reflect the average yearly return you anticipate receiving from your assets.

Investment earnings

Gains on assets in your Roth IRA are referred to as investment earnings. You must generally be 59 and a half years old to withdraw investment returns from your Roth IRA account. On the other hand, the money you have contributed to a Roth IRA may be withdrawn at any time without being subject to taxes or penalties.