Project your tax-free retirement balance with annual contributions and compounded growth.
$
$
Balance at Retirement (Tax-Free)
$1,142,160at age 65
Roth IRA contributions and earnings grow tax-free and can be withdrawn tax-free in retirement (subject to age and holding period rules). Assumes consistent annual contributions and returns.
Note: 2024 contribution limits are $7,000/year (under 50) or $8,000/year (50+). Income limits apply; check IRS rules.
Total Contributions$255,000
Tax-Free Growth$887,160
Share
What is the Roth IRA Calculator?
A Roth IRA calculator estimates your account balance at retirement by compounding your current Roth IRA balance, annual contributions, and expected investment returns year by year. Unlike traditional IRAs or 401(k)s, Roth IRA withdrawals are entirely tax-free once you meet the holding period and age requirements. You input your starting age, retirement age, current balance, annual contribution amount, and expected annual return rate; the calculator compounds everything to show your projected tax-free retirement balance.
How it works
The calculator begins with your current Roth IRA balance and adds your annual contribution each year. After adding the contribution, the entire balance (previous balance plus contribution) is multiplied by your expected annual return rate. This compounding effect repeats for each year until you reach your retirement age, showing how regular contributions combined with investment growth build your tax-free nest egg.
The formula compounds your current balance and accumulates annual contributions with investment growth. Both the opening balance and each year's contribution earn returns, allowing your money to grow tax-free without any distributions to taxes.
Examples
Input
Result
Notes
Age 30, retire at 65, balance $10,000, contribute $7,000/year, 7% return
Starting later at 40 with only 25 years to retirement means growth is lower; still significantly outpaces contributions due to compounding
How to use the Roth IRA Calculator
Enter your current age and desired retirement age (typically 59.5 or later for penalty-free withdrawals)
Input your current Roth IRA balance (if starting fresh, enter 0)
Specify how much you plan to contribute annually to your Roth IRA (up to IRS limits)
Enter your expected average annual investment return rate (historical stock market average is roughly 7-10%)
Click calculate to see your projected tax-free balance at retirement
Review the breakdown of contributions versus investment growth to understand compounding power
Benefits
See how much you'll have saved entirely tax-free by retirement—no taxes owed on withdrawals
Understand the exponential power of compound interest when you start early; money invested in your 20s and 30s grows for decades
Test different contribution amounts to find what's sustainable for your budget while maximizing long-term growth
Compare scenarios with different return assumptions to understand best-case, realistic, and conservative outcomes
Motivate yourself by watching investment growth eventually exceed your total contributions
Plan for tax-free early withdrawals after 5 years (contributions only) if needed, while main balance continues growing
Tips & common mistakes
Common mistakes
Assuming you can't contribute because of income limits without checking current thresholds; phase-out ranges apply, not hard cutoffs
Using overly aggressive return assumptions without understanding market volatility; 7-8% is more conservative than 10%
Contributing less than the IRS limit because you think you can catch up later; time in market beats timing the market
Forgetting the 5-year holding rule; you must hold your Roth IRA for 5 tax years before withdrawing earnings tax-free
Tips
Max out your Roth IRA contribution ($7,000 or $8,000 if 50+) before other retirement accounts if your income qualifies
Start contributing as early as possible in each year; even January contributions have more time to compound than December
If you exceed income limits, explore backdoor Roth conversions as an alternative way to fund your Roth
Use lower return assumptions (5-6%) for conservative planning; beating your projection feels like winning
Rebalance your investments annually to maintain your target asset allocation and stay on track
Frequently asked questions
What is a Roth IRA and how is it different from a Traditional IRA?
A Roth IRA is a retirement account where you contribute after-tax dollars, but all earnings grow and can be withdrawn completely tax-free in retirement. A Traditional IRA offers a tax deduction upfront but taxes all withdrawals in retirement. Roth is ideal if you expect to be in a higher tax bracket later or want tax-free growth.
What return rate should I assume?
The historical S&P 500 average is around 10%, but many planners use 7-8% to be conservative. Your actual return depends on your asset allocation. If you're young with a long timeline, a stock-heavy portfolio targeting 7-8% is reasonable; more conservative investors might assume 5-6%.
Are there contribution limits for a Roth IRA?
Yes—in 2024, you can contribute up to $7,000/year if under 50, or $8,000/year if 50 or older. Your contribution limit phases out if your Modified Adjusted Gross Income (MAGI) exceeds certain thresholds. Check the current IRS limits before contributing.
Can I withdraw my contributions early without penalty?
Yes—one advantage of a Roth IRA is that you can withdraw your contributions (but not earnings) at any time without penalty or taxes. However, you must hold the account for 5 tax years before withdrawing earnings tax-free, and typically be age 59.5 or older.
What if I earn too much to contribute to a Roth?
If your income exceeds the contribution limits, you have options: a backdoor Roth conversion (contribute to a Traditional IRA then convert to Roth), or a mega backdoor Roth if your employer plan allows. Consult a tax professional for your specific situation.
Does this calculator account for required minimum distributions (RMDs)?
No—Roth IRAs don't have RMDs during the account holder's lifetime, which is a major advantage. You can leave your Roth untouched to grow indefinitely. This calculator assumes you let everything compound until retirement without withdrawals.