Years to invest until retirement plan withdrawals begin must be a whole number between 5 and 99. Roth accounts must be at least five years old in order to qualify for tax-free withdrawals. If you begin taking withdrawals within the next five years, consider a traditional account.
Click PREVIOUS to return to the calculator.
Participants in 401(k) and 403(b) plans that accept both Roth and traditional contributions can contribute either type or a combination of both. With traditional accounts, withdrawals of pretax contributions and earnings are taxable and may be subject to a 10% early withdrawal penalty if taken before age 59-1/2. Qualified distributions from Roth accounts are tax- and penalty-free if the first Roth contribution was made at least five years before, and if you are at least 59-1/2, are disabled or have died. For nonqualified distributions from Roth accounts, earnings are taxable and may be subject to a 10% early withdrawal penalty. IRS contribution limits are adjusted for inflation in $500 increments.
Future tax rates may change. The analyzer applies tax rates to all taxable income. When estimating your future tax rate, you should consider whether the amount of taxable distributions might push you into a higher tax bracket.
Regular investing does not ensure a profit or protect against loss. Hypothetical annual rates of return are not intended to reflect actual results; your results may vary based on market conditions. The analyzer compounds earnings monthly and assumes that withdrawals are made at the beginning of the year. The analyzer does not take certain factors into account, including state and local taxes, required minimum distributions and holding periods, early withdrawal penalties, matching contributions, previous retirement plan contributions and IRS withdrawal rules. Be sure to consult with a financial professional or tax adviser to discuss your specific situation.
This analyzer is intended for use in making a rough comparison of Roth and traditional retirement plan accounts. We do not guarantee the accuracy of the results or their relevance to your particular circumstances. Results shown are hypothetical and are not intended to portray actual results. Your results will differ. We encourage you to seek the assistance of your financial professional.