Roth Ira Calculator Fidelity

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Fidelity Roth IRA Growth Calculator

Enter your details and click 'Calculate' to see your projected Roth IRA balance.

function calculateRothIRA() { var currentAge = parseFloat(document.getElementById('currentAge').value); var retirementAge = parseFloat(document.getElementById('retirementAge').value); var currentBalance = parseFloat(document.getElementById('currentBalance').value); var annualContribution = parseFloat(document.getElementById('annualContribution').value); var annualReturnRate = parseFloat(document.getElementById('annualReturnRate').value) / 100; if (isNaN(currentAge) || isNaN(retirementAge) || isNaN(currentBalance) || isNaN(annualContribution) || isNaN(annualReturnRate)) { document.getElementById('rothIraResult').innerHTML = 'Please enter valid numbers for all fields.'; return; } if (retirementAge <= currentAge) { document.getElementById('rothIraResult').innerHTML = 'Retirement Age must be greater than Current Age.'; return; } var yearsToRetirement = retirementAge – currentAge; var totalContributions = currentBalance; // Start with current balance as already contributed var futureValueCurrentBalance = currentBalance * Math.pow((1 + annualReturnRate), yearsToRetirement); var futureValueContributions = 0; if (annualReturnRate === 0) { futureValueContributions = annualContribution * yearsToRetirement; } else { futureValueContributions = annualContribution * ((Math.pow((1 + annualReturnRate), yearsToRetirement) – 1) / annualReturnRate); } totalContributions += annualContribution * yearsToRetirement; var projectedRothBalance = futureValueCurrentBalance + futureValueContributions; var totalEarnings = projectedRothBalance – totalContributions; document.getElementById('rothIraResult').innerHTML = '

Projected Roth IRA at Retirement

' + 'Years until Retirement: ' + yearsToRetirement + ' years' + 'Total Contributions Made: $' + totalContributions.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + " + 'Total Tax-Free Earnings: $' + totalEarnings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + " + 'Projected Roth IRA Balance: $' + projectedRothBalance.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "; }

Understanding Your Roth IRA Growth with Fidelity

A Roth IRA is a powerful retirement savings vehicle known for its tax-free growth and tax-free withdrawals in retirement. Unlike traditional IRAs, contributions to a Roth IRA are made with after-tax dollars, meaning you won't get an upfront tax deduction. However, this trade-off comes with a significant benefit: all qualified withdrawals in retirement are completely free from federal income tax, and often state income tax as well.

Why Choose a Roth IRA?

  • Tax-Free Withdrawals: The biggest advantage is that your earnings and contributions can be withdrawn tax-free in retirement, provided you meet certain conditions (e.g., account open for 5 years and you're over 59½).
  • Tax-Free Growth: Your investments grow without being subject to annual taxes on dividends or capital gains within the account.
  • Flexibility: You can withdraw your contributions (but not earnings) at any time, tax-free and penalty-free, for any reason.
  • No Required Minimum Distributions (RMDs): Unlike traditional IRAs, Roth IRAs do not have RMDs for the original owner, allowing your money to continue growing throughout your lifetime and providing flexibility for estate planning.
  • Future Tax Certainty: If you believe tax rates will be higher in the future, paying taxes now on your contributions can be a smart move.

How This Calculator Works

This Fidelity Roth IRA Growth Calculator helps you visualize the potential future value of your Roth IRA. It takes into account several key factors:

  • Your Current Age: Your starting point for saving.
  • Desired Retirement Age: The age at which you plan to stop working and begin withdrawing from your Roth IRA.
  • Current Roth IRA Balance: Any money you've already accumulated in your Roth IRA.
  • Annual Roth IRA Contribution: The amount you plan to contribute to your Roth IRA each year. Remember, there are annual contribution limits set by the IRS (e.g., $6,500 for 2023, with an additional catch-up contribution for those 50 and older). This calculator allows you to input your desired amount, but it's crucial to stay within IRS limits.
  • Expected Annual Return Rate: This is the average annual percentage your investments are expected to grow. It's an estimate, as actual returns can vary significantly. Common estimates range from 5% to 8% for diversified portfolios over long periods.

The calculator uses these inputs to project your Roth IRA balance at your desired retirement age, showing you the power of compounding and consistent contributions.

Why Consider Fidelity for Your Roth IRA?

Fidelity is a leading financial services provider offering a wide range of investment options, robust research tools, and competitive fees, making it a popular choice for Roth IRA accounts. With Fidelity, you can typically choose from:

  • A vast selection of mutual funds (including Fidelity's own low-cost index funds).
  • Exchange-Traded Funds (ETFs).
  • Individual stocks and bonds.
  • Guidance and planning resources to help you make informed investment decisions.

Important Considerations

While this calculator provides a valuable estimate, remember that it's based on assumptions. Actual investment returns can fluctuate, and future tax laws may change. It's always a good idea to consult with a financial advisor to create a personalized retirement plan that aligns with your specific goals and risk tolerance.

Start exploring your Roth IRA potential today and take a step towards a financially secure retirement!

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