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.
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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. The maximum annual IRA contribution of $5,500 is unchanged for 2017. 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 2017. 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.
Roth IRA 2017 Contribution Phaseout
Tax Filing Status
Income Phase-Out Range
*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 Standard & Poor’s 500 (S ?>