About the Roth IRA Calculator
A Roth IRA calculator projects tax-free growth from after-tax contributions. Because qualified withdrawals are entirely untaxed, a Roth is uniquely valuable over long horizons — decades of investment growth escape tax altogether.
The formula
FV = P(1 + r)ᵗ + C · [((1 + r)ᵗ − 1) / r]Contributions are made with after-tax income, so the projected balance is what you actually get to spend. No tax is deducted on qualified withdrawal.
How to use this calculator
- 1Enter your Current Balance ($). The field starts at
15000, which you can overwrite. - 2Enter your Annual Contribution ($). The field starts at
7000, which you can overwrite. - 3Enter your Expected Annual Return (%). The field starts at
7, which you can overwrite. - 4Enter your Years Until Withdrawal. The field starts at
30, which you can overwrite. - 5Read the result straight away — it recalculates as you type, so there is no button to press. Use Share to copy a link that reopens the page with your exact numbers filled in.
Worked example
| Input | Value |
|---|---|
| Current Balance ($) | 15000 |
| Annual Contribution ($) | 7000 |
| Expected Annual Return (%) | 7 |
| Years Until Withdrawal | 30 |
Result
Tax-Free Balance: $821,695.12
Total Contributed: $225,000
Tax-Free Gains: $596,695.12
Those are the values the page loads with, so you can reproduce this result yourself and then change one field at a time to see what drives the outcome.
Understanding your result
The advantage compounds with time. Thirty years of growth on 7,000 annual contributions produces several hundred thousand dollars of gains, and in a Roth none of it is taxed. In a taxable account the same growth would face capital gains tax; in a traditional IRA it would be taxed as ordinary income on withdrawal.
Roth IRAs are also more flexible than most retirement accounts. Contributions — though not earnings — can be withdrawn at any time without tax or penalty, which makes a Roth a reasonable secondary emergency reserve. There are also no required minimum distributions, so the balance can keep growing untouched and pass to heirs.
Things worth knowing
- Contributions can be withdrawn penalty-free at any time. Earnings generally cannot before age 59½ and five years.
- Income limits restrict direct contributions at higher earnings, though a backdoor Roth conversion may be available.
- No required minimum distributions, unlike traditional IRAs and 401(k)s.
- A Roth is usually most advantageous early in a career, when your tax rate is lower than it will later be.
- Contribution limits are set annually, with a catch-up allowance from age 50.
Frequently asked questions
What makes a Roth IRA different?+
Contributions are after-tax, but all growth and qualified withdrawals are entirely tax-free. A traditional IRA reverses this: a deduction now, tax on withdrawal later.
Can I withdraw from a Roth IRA before retirement?+
Contributions yes, at any time, without tax or penalty since they were already taxed. Earnings generally require you to be 59½ and to have held the account five years, with limited exceptions.
Roth or traditional — which should I choose?+
Roth if you expect a higher tax rate in retirement than now, which favours younger and lower-earning savers. Traditional if you expect a lower rate. Holding both hedges an unknowable future tax code.
What if I earn too much to contribute?+
Direct contributions phase out above income limits, but a backdoor Roth — contributing to a traditional IRA then converting — is a common route. The pro-rata rule can complicate it, so take advice.