Roth IRA Calculator
Project how your Roth IRA balance can grow tax-free over time.
How does a Roth IRA grow tax-free?
A Roth IRA is funded with money you've already paid income tax on, which means every dollar of growth inside the account — dividends, interest, and capital gains — is never taxed again as long as you follow IRS withdrawal rules (generally age 59½ and the account being open at least five years). This calculator adds your annual contribution to your existing balance and compounds the entire amount at your expected annual return, year after year, to show how a relatively small yearly contribution can snowball into a substantial tax-free nest egg over a few decades.
How much can I contribute to a Roth IRA?
The IRS sets an annual contribution limit that changes periodically — as of recent years it has been in the neighborhood of $7,000 per year for those under 50, with an additional "catch-up" amount allowed for those 50 and older, though the exact figures are adjusted for inflation and eligibility phases out at higher incomes. Always check the current-year IRS limit before contributing, since over-contributing can trigger a penalty, but use the default in this calculator as a reasonable planning estimate.
Roth IRA vs. traditional retirement accounts
Unlike a traditional IRA or 401(k), a Roth IRA gives you no tax deduction today, but you avoid paying any tax later on decades of compounded growth — which can be a substantial advantage the earlier and longer you invest. Because there's no upfront tax break, many people find a Roth IRA especially attractive early in their careers when their income, and therefore their tax rate, tends to be lower than it will be later. Use the calculator above to see how your specific contribution and time horizon translate into a projected balance.
Frequently Asked Questions
Is a Roth IRA really tax-free?
Yes, as long as you meet the IRS rules — generally that you're at least 59½ years old and the account has been open for at least five years. Qualified withdrawals of both your contributions and all the growth are completely free of federal income tax.
How much can I contribute to a Roth IRA each year?
The IRS sets an annual limit that's adjusted periodically for inflation, and it has been around $7,000 per year for those under 50 in recent years, with a higher catch-up limit for those 50 and older. Eligibility to contribute also phases out at higher income levels, so check the current-year IRS figures directly.
What's the difference between a Roth IRA and a traditional IRA?
A traditional IRA is usually funded with pre-tax dollars, giving you a tax deduction now, but withdrawals in retirement are taxed as ordinary income. A Roth IRA is funded with after-tax dollars — no upfront deduction — but qualified withdrawals, including all the growth, are tax-free.
Can I withdraw my Roth IRA contributions early without penalty?
Generally yes — because you already paid tax on your contributions, you can withdraw the amount you contributed (not the earnings) at any time without tax or penalty. Withdrawing earnings early, however, can trigger both taxes and a 10% penalty unless an exception applies.
Is there an income limit to contribute to a Roth IRA?
Yes, the ability to contribute directly to a Roth IRA phases out above certain income thresholds set annually by the IRS. High earners who exceed the limit sometimes use a "backdoor Roth" strategy involving a traditional IRA contribution followed by a conversion — consult a tax professional before attempting this.
What rate of return should I assume for my Roth IRA?
It depends entirely on how the account is invested. Long-term historical stock market averages are often cited around 7-10% annually before inflation, but a more conservative 6-7% is commonly used for retirement planning to account for down years and fees.
Should I max out my Roth IRA every year?
Many financial planners recommend maxing out a Roth IRA if you can afford to, especially early in your career, since decades of tax-free compounding on the maximum contribution can add up to a significant advantage over a partially-funded account. Use the calculator above to compare partial versus full contributions.
How accurate is this Roth IRA projection?
It's a simplified, directional estimate. It assumes a constant contribution and a steady annual return every year, while real markets fluctuate significantly year to year. Treat the result as a planning tool, not a guarantee, and revisit it periodically as your contributions and goals change.