Roth IRA Calculator

A Roth Individual Retirement Account (Roth IRA) is an individual retirement vehicle established under United States Internal Revenue Code Section 408A

Finance

Current Roth IRA Balance

Existing balance in your Roth IRA account

Annual Contribution

$/yr

Annual post-tax contribution ($7,000 IRS 2025/2026 limit under age 50; $8,000 for 50+)

Estimated Annual Return Rate

Expected compound annual growth rate

Investment Horizon (Years)

years

Number of years until retirement withdrawals begin

Statutory IRA Limit (User-Editable)

IRS 2025/2026 IRA contribution limit benchmark (user-adjustable)

Formula & Methodology

FV = PV × (1 + r)^t + Annual Contribution × [((1 + r)^t − 1) ÷ r] (Qualified withdrawals taxed at 0%)

A Roth IRA compounds after-tax dollars at annual growth rate r over t years. Because capital gains and dividends are never taxed upon qualified withdrawal after age 59½, the final future value represents 100% spendable after-tax purchasing power.

Projected 100% Tax-Free Roth IRA Balance (25 Years)

$497,018 Tax-Free

Overview

A Roth Individual Retirement Account (Roth IRA) is an individual retirement vehicle established under United States Internal Revenue Code Section 408A. Funded with after-tax earned income, investments inside a Roth IRA grow completely free of federal and state taxes, and qualified withdrawals during retirement are 100% tax-exempt.

Educational & Financial Planning Disclaimer: This calculator models hypothetical compound returns under US federal tax guidelines. It does not constitute financial, investment, or tax advice. IRS contribution limits and modified adjusted gross income (MAGI) phase-outs change annually; consult a certified financial planner or tax advisor.

Worked Examples

25-Year Horizon at $7,000 Annual Contribution (7% Return)

Starting Balance = $10,000, Annual Contribution = $7,000, Return = 7%, Years = 25.

Growth of starting balance: $10,000 × (1.07)^25 = $10,000 × 5.427433 = $54,274.33.
Growth of annual contributions: $7,000 × [((1.07)^25 − 1) ÷ 0.07] = $7,000 × 63.24904 = $442,743.28.
Total balance: $54,274.33 + $442,743.28 = $497,017.61.
Total out-of-pocket deposits: $10,000 + ($7,000 × 25) = $185,000.
Total tax-free compound growth: $497,017.61 − $185,000 = $312,017.61.

Final Answer: $497,018 (100% Tax-Free)

Maxing Out Over 30 Years at 8% Return

Starting Balance = $0, Annual Contribution = $7,000, Return = 8%, Years = 30.

Contributions growth: $7,000 × [((1.08)^30 − 1) ÷ 0.08] = $7,000 × 113.28321 = $792,982.47.
Total deposited: $210,000. Total tax-free growth: $582,982.47.

Final Answer: $792,982 Tax-Free

Short-Term 10-Year Accumulation at 6% Return

Starting Balance = $15,000, Annual Contribution = $7,000, Return = 6%, Years = 10.

Initial balance: $15,000 × (1.06)^10 = $26,862.72.
Contributions: $7,000 × [((1.06)^10 − 1) ÷ 0.06] = $7,000 × 13.18079 = $92,265.53.
Total balance: $26,862.72 + $92,265.53 = $119,128.25.

Final Answer: $119,128 Tax-Free

How to Use This Calculator

Enter your existing Roth IRA account balance.

Enter your planned annual contribution (up to the $7,000 standard limit, or $8,000 for age 50+).

Input your expected long-term annualized investment return and years until retirement.

Review your total projected tax-free retirement nest egg and cumulative tax-free gains.

Frequently Asked Questions

What are the income limits to contribute to a Roth IRA?

For 2025/2026, single tax filers with a Modified Adjusted Gross Income (MAGI) under $150,000 can contribute the full amount; phase-out occurs between $150,000 and $165,000. For married couples filing jointly, the phase-out range is $236,000 to $246,000. High earners exceeding these limits often utilize a Backdoor Roth IRA strategy.

Can I withdraw my contributions from a Roth IRA before age 59½?

Yes. Because Roth IRA contributions are made with after-tax money, you can withdraw your original contributions (principal) at any time, for any reason, completely penalty-free and tax-free. However, withdrawing investment earnings before age 59½ and before the 5-year account aging rule is met triggers income tax and a 10% penalty.

Are Roth IRAs subject to Required Minimum Distributions (RMDs)?

No. Unlike traditional IRAs and traditional 401(k) plans, original owners of Roth IRAs are never required to take Required Minimum Distributions (RMDs) during their lifetime, making Roth accounts exceptional tools for generational wealth transfer.

What is the 5-year rule for Roth IRA withdrawals?

To withdraw investment earnings completely tax-free after reaching age 59½, at least 5 tax years must have elapsed since January 1 of the tax year in which you made your very first contribution to any Roth IRA.

Is a Roth IRA better than a Traditional IRA?

Neither is universally better; it depends on your current versus future tax rate. If you expect your tax rate to be higher in retirement than it is today, a Roth IRA is generally mathematically superior. If you are in your peak earning years and expect a lower tax bracket in retirement, a Traditional IRA tax deduction today may be more beneficial.