About the Roth IRA Calculator
Roth IRA contributions are made with after-tax money. In exchange, qualified withdrawals in retirement — generally after age 59½ and once the account has been open for five years — are not taxed, including the investment growth.
This calculator projects growth only. It does not determine whether you are eligible to contribute; eligibility depends on your modified adjusted gross income and filing status.
How It Works
Your current balance and each year's contribution (spread evenly across 12 months) grow at the monthly equivalent of your expected annual return until retirement.
The tax-free growth illustration multiplies the projected growth by the rate you choose, showing the tax that would apply if the same growth were taxable. It is not a tax calculation.
Formula
- Bcurrent balance
- Aannual contribution
- imonthly return = (1 + r)^(1/12) − 1
- mmonths until retirement
Example
A 30-year-old with $5,000 in a Roth IRA contributes $7,000 a year and assumes a 7% return until 65.
Inputs
- Balance
- $5,000
- Contribution
- $7,000/yr
- Return
- 7.00%
- Years
- 35
Results
- Estimated value
- $1,051,707.53
- Contributions
- $245,000.00
- Growth
- $801,707.53
- Illustration at 22%
- $176,375.66
Assumptions & Limitations
- Qualified withdrawals are assumed; non-qualified withdrawals of earnings can be taxed and penalized.
- Contribution limits from the latest year in the centralized data are used only for a warning; the limit is shared across all your IRAs and can be reduced by income.
- Constant return and no fees; results are in future dollars (not inflation-adjusted).
- No eligibility check: Roth IRA contributions phase out at higher incomes, which this calculator does not assess.
Understanding Your Results
- Estimated Future Value: Projected Roth IRA balance at retirement.
- Investment Growth: Earnings above your balance and contributions — the part a Roth can shield from tax.
- Illustrative Tax Avoided: What the growth would cost in tax at the illustrative rate, if it were taxable.