Roth IRA Calculator
Project your Roth IRA's tax-free balance at retirement by combining your existing savings with years of annual contributions compounding at your expected return. Use it to see how much tax-free income you can generate after age 59½.
About this calculator
A Roth IRA grows tax-free: contributions are made with after-tax dollars and qualified withdrawals in retirement are never taxed. The future value has two components. Your current balance grows as: FV_balance = currentBalance × (1 + r)ⁿ, where r = expectedReturn/100 and n = retirementAge − currentAge. Your ongoing contributions grow as a future value of an annuity: FV_contributions = annualContribution × eligibilityFactor × [(1 + r)ⁿ − 1] / r. The eligibilityFactor (incomeLevel) scales contributions based on IRS income phase-out rules. Total projected balance = FV_balance + FV_contributions. Because qualified withdrawals are tax-free, this balance is directly comparable to after-tax retirement income, unlike a traditional 401(k) which will be taxed upon withdrawal.
How to use
Suppose you are 30, plan to retire at 65, have a $10,000 current balance, contribute $6,000/year, expect a 7% annual return, and are fully eligible (factor = 1). n = 65 − 30 = 35 years. FV_balance = $10,000 × (1.07)³⁵ = $10,000 × 10.677 = $106,766. FV_contributions = $6,000 × 1 × [(1.07)³⁵ − 1] / 0.07 = $6,000 × 138.237 = $829,421. Total projected Roth IRA balance = $106,766 + $829,421 = $936,187, all tax-free.
Frequently asked questions
What are the 2024 Roth IRA contribution limits and income phase-out rules?
For 2024, the maximum Roth IRA contribution is $7,000 per year ($8,000 if you are age 50 or older). Eligibility phases out for single filers with modified adjusted gross income (MAGI) between $146,000 and $161,000, and for married filing jointly between $230,000 and $240,000. Above the upper threshold, no direct Roth contribution is allowed, though a 'backdoor Roth' conversion may still be possible.
What is the difference between a Roth IRA and a traditional IRA for retirement savings?
The key difference is when you pay taxes. Traditional IRA contributions may be tax-deductible now, but withdrawals in retirement are taxed as ordinary income. Roth IRA contributions are made with after-tax dollars, but all qualified withdrawals — including decades of growth — are completely tax-free. A Roth IRA is generally more advantageous if you expect to be in a higher tax bracket in retirement than you are today.
When can I withdraw Roth IRA earnings tax-free and penalty-free?
Roth IRA earnings can be withdrawn tax-free and penalty-free once you meet two conditions: you are at least 59½ years old, and the account has been open for at least five years (the five-year rule). Contributions (not earnings) can be withdrawn at any time without taxes or penalties since they were already taxed. Early withdrawal of earnings before age 59½ generally incurs income tax plus a 10% penalty, with limited exceptions for disability or first-time home purchase.