How to Calculate an Hourly Rate to Annual Salary

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Roth IRA Growth Calculator

The 2024 contribution limit is $7,000 ($8,000 if age 50+).
Historical market average is often cited around 7-10%.
Total Principal Invested: $0
Total Interest Earned: $0
Total Balance at Retirement: $0

*Results assume contributions are made at the beginning of each year and returns compound annually.

Understanding Your Roth IRA Growth Potential

A Roth IRA is one of the most powerful retirement savings vehicles available to Americans. Unlike a traditional IRA or 401(k), contributions to a Roth IRA are made with after-tax dollars. This means you don't get an immediate tax break, but your money grows tax-free, and qualified withdrawals in retirement are 100% tax-free.

Using a Roth IRA Calculator allows investors to visualize the compound growth effect over decades. Even small contributions, when given enough time to grow, can result in a substantial tax-free nest egg.

How This Calculator Works

This tool projects the future value of your Roth IRA based on several key variables:

  • Starting Balance: The amount already in your account.
  • Annual Contribution: How much you plan to add each year. For 2024, the limit is generally $7,000 for those under 50 and $8,000 for those 50 and older.
  • Time Horizon: Calculated by subtracting your current age from your expected retirement age.
  • Rate of Return: The estimated annual percentage growth of your investments.

The Power of Tax-Free Compounding

The primary advantage of a Roth IRA is the mathematical magic of compound interest combined with tax efficiency. In a taxable brokerage account, you might pay capital gains tax every year or upon selling assets. In a Roth IRA, those taxes are eliminated.

For example, if you contribute the maximum amount annually from age 25 to 65, your total contributions might be around $280,000 (depending on limit changes). However, with an average 7% return, your account value could exceed $1.5 million. The $1.2 million in growth is yours to keep, tax-free.

Frequently Asked Questions

What is the 2024 contribution limit?

The total contribution limit for all of your traditional and Roth IRAs is $7,000 for 2024 ($8,000 if you're age 50 or older).

Are there income limits for Roth IRAs?

Yes. For 2024, single filers must have a Modified Adjusted Gross Income (MAGI) under $161,000 to contribute (eligibility phases out starting at $146,000). Married couples filing jointly must have a MAGI under $240,000 (phase-out starts at $230,000).

Can I withdraw my money early?

You can withdraw your contributions at any time, tax-free and penalty-free. However, withdrawing earnings before age 59½ typically incurs income tax and a 10% penalty, unless an exception applies.

function calculateRothIRA() { // 1. Get input values var startBal = document.getElementById("initialBalance").value; var annualContrib = document.getElementById("annualContribution").value; var curAge = document.getElementById("currentAge").value; var retAge = document.getElementById("retirementAge").value; var rate = document.getElementById("rateOfReturn").value; // 2. Validate inputs if (startBal === "" || annualContrib === "" || curAge === "" || retAge === "" || rate === "") { alert("Please fill in all fields to calculate your results."); return; } // Convert to numbers var P = parseFloat(startBal); var PMT = parseFloat(annualContrib); var currentAgeNum = parseFloat(curAge); var retirementAgeNum = parseFloat(retAge); var r = parseFloat(rate) / 100; // Check logical errors if (retirementAgeNum <= currentAgeNum) { alert("Retirement age must be greater than current age."); return; } var years = retirementAgeNum – currentAgeNum; // 3. Calculation Logic (Compound Interest with Annual Contributions) // Formula: FV = P(1+r)^t + PMT * [ ((1+r)^t – 1) / r ] // Assuming contributions made at the END of the period usually, // but for IRAs people often do monthly or beginning. // Let's use standard annuity due formula (beginning of period) for contributions // or simple annuity (end). Let's stick to End of Period for simplicity unless specified, // but let's iterate year by year for clarity on total principal. var totalBalance = P; var totalContributed = P; for (var i = 0; i < years; i++) { // Add contribution totalBalance += PMT; totalContributed += PMT; // Apply interest totalBalance = totalBalance * (1 + r); } // Calculate Total Interest var totalInterest = totalBalance – totalContributed; // 4. Formatting Output // Helper function for currency formatting var formatter = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD', minimumFractionDigits: 0, maximumFractionDigits: 0, }); // 5. Display Results document.getElementById("displayPrincipal").innerHTML = formatter.format(totalContributed); document.getElementById("displayInterest").innerHTML = formatter.format(totalInterest); document.getElementById("displayTotal").innerHTML = formatter.format(totalBalance); // Show the results div document.getElementById("results").style.display = "block"; }

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