Roth IRA Calculator
30
65
$
8.00%
$
Balance at Retirement$1,338,098.12
Total Contributions$245,000.00
Tax-Free Growth$1,093,098.12
A Roth IRA is funded with after-tax dollars, so qualified withdrawals in retirement, including all investment gains, come out completely tax-free. This calculator projects what your account could be worth at retirement by compounding your starting balance plus your annual contributions month by month at an expected rate of return. It then separates the total you put in from the tax-free growth that compounding produced.
Formula
FV = B(1 + i)^N + (C/12) · ((1 + i)^N − 1) / i
- B
- Current Roth IRA balance (lump sum that grows)
- C
- Annual contribution, split into 12 equal end-of-month deposits
- i
- Monthly return = expected annual return ÷ 12 ÷ 100
- N
- Number of months = (retirement age − current age) × 12
How it works
- Enter your current age, your target retirement age, your current Roth IRA balance, and the amount you plan to contribute each year. The annual contribution is divided by 12 and invested at the end of every month.
- Set your expected annual return. The calculator compounds the starting balance and the stream of monthly contributions across the months between your current age and retirement age.
- Read the projected balance at retirement, the total of everything you contributed (starting balance plus yearly contributions), and the tax-free growth, which is the projected balance minus your total contributions.
Worked example
A 30-year-old with $10,000 saved contributes $7,000 a year and expects a 7% annual return until age 65.
- Months to retirement: (65 − 30) × 12 = 420; monthly return i = 7 ÷ 12 ÷ 100 = 0.0058333.
- Monthly contribution: 7,000 ÷ 12 = $583.33, deposited at the end of each month.
- Compounding the $10,000 lump sum and the monthly deposits over 420 months gives a projected balance of $1,165,676.70.
- Total contributions: 10,000 + 7,000 × 35 = $255,000; tax-free growth: 1,165,676.70 − 255,000 = $910,676.70.
Balance at retirement about $1,165,676.70, total contributions $255,000, and tax-free growth about $910,676.70.
Frequently asked questions
- How is a Roth IRA different from a traditional IRA?
- A Roth IRA is funded with money you have already paid tax on, so qualified withdrawals after age 59 and a half are tax-free. A traditional IRA usually gives you a deduction up front but taxes withdrawals as ordinary income later.
- Does this calculator apply the annual contribution limit?
- No. It compounds whatever annual contribution you enter without capping it. For 2024 the IRS limit is $7,000, or $8,000 if you are age 50 or older, and high earners may face reduced limits, so keep your entry within the rules that apply to you.
- Why is the projected growth shown as tax-free?
- Because Roth contributions are made with after-tax dollars, the IRS does not tax the earnings when you take a qualified distribution. The growth figure here represents gains you would generally keep entirely, unlike a taxable brokerage account.
- Are Roth IRAs subject to required minimum distributions?
- No. Unlike traditional IRAs and 401(k)s, a Roth IRA has no required minimum distributions during the original owner’s lifetime, so the balance can keep compounding tax-free for as long as you leave it invested.