Roth IRA Calculator
Investing plays the long game, and the numbers don’t lie. Starting early is more important than going big.
40 Years from Today
About Roth IRAs
At Club Money, we are big fans of the Roth IRA for your 20s and 30s. There are a few reasons why this particular type of investment account is a great place to put money when you’re starting out.
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Unlike most 401(k) plans, a Roth IRA is separate from benefits that may (or may not) be offered by your employer. No benefits? Changing jobs? No problem!
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The big deal with a Roth IRA is after-tax money. While a 401(k) is pre-tax, a Roth is different. You pay taxes first, then make contributions. Your money grows tax free. Withdrawals in retirement are tax free too.
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Since you’ve already paid taxes on the money in a Roth IRA, you can take the contributions* out of the account at any time, for any reason. It’s the retirement account that won’t keep all your money locked up for decades.
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A Roth IRA gives you access to a wide range of investments, including index funds, stocks and bonds, with different levels of risk.
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The contribution limit set by the IRS for Roth IRAs in 2026 is $7,500. Setting a goal to reach that amount every 12 months will help you figure out the savings methods that work best for you.
The Fine Print
There are a few things to keep in mind with a Roth IRA and these calculations.
*It’s true that contributions can be withdrawn at any time, tax free. However, earnings cannot be withdrawn without penalty before retirement. The blue line shows contributions, what you could freely withdraw at any age. The orange line represents contributions plus earnings, which would carry a penalty if you’re younger than 59½.
There are restrictions on contributing to a Roth IRA if you make more than $153,000 a year. If you make less than that, there are no restrictions.
6% is an average annual rate of return for a diversified investment portfolio over time. Some years will be less, some will be more, but money experts expect 6-7% per year in the long term.