Roth IRA calculators are excellent tools for financial planning. They can help you estimate the value of your account and see how it can grow over time. Because it is important to know what your Roth IRA is worth to determine if you are on your way to a comfortable retirement, it is important to have an excellent calculator at your disposal. With this in mind, here are six of the best Roth IRA calculators and an overview of their purpose.
1. Bank rate
The Roth IRA calculator at Bankrate is a solid option for old-age provision. It can estimate the value of your account at the time of your retirement and can use a number of factors to get a better picture. With this, you can even check your taxable savings by entering your marginal tax rate.
2. Nerd wallet
Nerdwallet also has a robust Roth IRA calculator. Unlike the bank rate, which only prompts you to fill out a group of fields, the nerd wallet version guides you through the process. That makes it comparatively user-friendly.
Another IRA calculator that is incredibly easy to use is available through SoFi. Users answer some basic questions and get an overview of the types of IRA they can use. It clearly shows the maximum allowable contribution based on the input data, which can be advantageous for old-age provision.
If you want to see if a traditional or Roth IRA is a better option for you, this Voya calculator can help you find out. After entering basic details, you can review your estimated retired account amounts as well as an after-tax comparison. You can easily find out if one approach suits you better than another.
Another comparison calculator, the Schwab version, contains fields for both the user and his spouse. This can be helpful for married couples because both sources of income and the spouse's age can be included in the equation.
If you want to find out whether you should convert a Roth IRA to a conventional, SEP or simple IRA, this calculator from Fidelity can help. After going through a few simple questions, users can review an analysis that shows the tax implications of the decision. This can be incredibly important for retirement planning as users get information to help them avoid a net loss.
Are Roth IRA calculators accurate?
It is important to understand that while the calculations performed are usually accurate, the Roth IRA calculators do not guarantee results. Some of the data is based on assumptions such as your expected return or overtime contributions. Nobody can be 100% sure when it comes to these factors. It's always a guess.
However, this does not mean that a Roth IRA calculator is not a great planning tool. It gives you an insight into how much you could have set aside for retirement, and that's helpful. It is only important to remember that nobody knows what the future holds. Depending on unforeseen factors, your account may end up being higher or lower.
If you want to make sure that you can achieve your goal, you should do the calculations conservatively. For example, assume a slightly lower return. This way, by the way, you create a buffer in your plan that increases the likelihood that you will reach your goal before retiring.
Do you know another amazing Roth IRA calculator? If so, let us know in the comments below.
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