How the Roth IRA Calculator Works
A Roth IRA is a retirement account in the United States. You put in money that you have already paid tax on. In return, the money grows without tax, and you can take it out in retirement without paying tax on it, if you follow the rules. The Roth IRA Calculator shows how big your account could be at retirement, and how much of it is growth that you will never be taxed on.
What you enter
- Your age now and your retirement age: the time between them is how long the money grows.
- Current balance: what is in your Roth IRA today.
- Yearly contribution: what you add each year. The calculator spreads it over 12 monthly deposits.
- Yearly return: the growth you expect on your investments.
- Inflation (optional): the yearly rise in prices, to show the result in today's money.
How the results are worked out
Each month your balance earns the monthly return, and a twelfth of your yearly contribution is added. With a monthly return r and n months:
balance at retirement = current balance x (1 + r)^n + monthly deposit x ((1 + r)^n - 1) / r your own money = current balance + yearly contribution x years growth = balance at retirement - your own money balance in today's money = balance at retirement / (1 + inflation)^years
In a Roth IRA, the growth is not taxed while it is in the account, and it is not taxed when you take it out after age 59 and a half, as long as the account has been open for at least 5 years.
A worked example
You are 30, with $10,000 in a Roth IRA. You contribute $7,000 a year ($583.33 a month), until you are 65. The return is 7% a year, and inflation is 2.5%.
| Result | Amount |
|---|---|
| Balance at 65 | $1,165,677 |
| Your own money ($10,000 + $7,000 x 35) | $255,000 |
| Tax-free growth | $910,677 (78% of the total) |
| Balance in today's money | $491,182 |
| Yearly income by the 4% rule of thumb | $46,627 |
More than three quarters of the balance is growth. If that growth had been taxed at 22% each time it was withdrawn, you would have paid about $200,000 in tax on it.
Chart: your own money and the growth
████████████████████████████████████████ $1,165,677 ■ Your contributions $255,000 (22%) ■ Tax-free growth $910,677 (78%)
Chart: how the balance grows
Age 30 █ $10,000 Age 35 ██ $55,939 Age 40 ████ $121,063 Age 50 ████████████ $344,261 Age 60 ███████████████████████████ $792,815 Age 65 ████████████████████████████████████████ $1,165,677
Contribution limits
The law limits how much you can put into all of your IRAs in one year. For 2025 the limit is $7,000, or $8,000 if you are 50 or older. You also need earned income, such as wages, at least as large as your contribution. The limits change from time to time, so check the current figures with the IRS. If you enter a contribution above the limit, the calculator warns you.
Income limits
You can only contribute the full amount if your income is below a limit. In 2025 the reduction starts at $150,000 for a single filer, and $236,000 for a married couple filing jointly. It ends completely at $165,000 and $246,000. Above that you cannot contribute directly to a Roth IRA. These limits also change, so check them with the IRS.
What changes the result
The yearly contribution, with the rest of the example unchanged:
| Yearly contribution | Balance at 65 |
|---|---|
| $3,000 | $565,325 |
| $5,000 | $865,501 |
| $7,000 | $1,165,677 |
$3,000 ███████████████████ $565,325 $5,000 ██████████████████████████████ $865,501 $7,000 ████████████████████████████████████████ $1,165,677
The age when you start matters even more. The same $10,000 and $7,000 a year, until 65:
| You start at | Balance at 65 |
|---|---|
| 25 | $1,694,255 |
| 30 | $1,165,677 |
| 35 | $792,815 |
| 40 | $529,796 |
| 45 | $344,261 |
| 50 | $213,384 |
And the return:
| Yearly return | Balance at 65 |
|---|---|
| 5% | $720,058 |
| 6% | $912,317 |
| 7% | $1,165,677 |
| 8% | $1,501,024 |
Roth or traditional?
A traditional IRA works the other way around. You may get a tax deduction now, but the money is taxed when you take it out. Which is better depends on whether your tax rate is higher now or in retirement. Say you have $9,000 of income before tax, and your tax rate now is 22%. You can put $7,020 in a Roth IRA, after paying $1,980 of tax, or the whole $9,000 in a traditional IRA. Both grow 10.68 times over 35 years at 7%. Then you take the money out:
| Your tax rate in retirement | Roth IRA | Traditional IRA after tax | Better |
|---|---|---|---|
| 12% | $74,950 | $84,559 | Traditional |
| 22% | $74,950 | $74,950 | Same |
| 32% | $74,950 | $65,341 | Roth |
Roth ███████████████████████████████████ $74,950 Traditional at 12% ████████████████████████████████████████ $84,559 Traditional at 22% ███████████████████████████████████ $74,950 Traditional at 32% ███████████████████████████████ $65,341
If your tax rate is lower in retirement, the traditional IRA wins. If it is higher, the Roth wins. If the two are equal, the results are the same. A Roth also has extra advantages: there are no required withdrawals for the owner, and you can take out your own contributions at any time without tax or penalty.
Tips
- Start early. Time is worth more than the amount.
- Contribute every year, up to the limit if you can. You can usually contribute for a year until the tax filing deadline of the next year.
- Get a full employer match first, if you have a 401(k), then use the Roth IRA.
- Choose low-cost investments. Fees can take a large part of the growth over 30 years.
- Try a cautious return, such as 5%, to see how you would do if the markets are weaker.
What this calculator does not include
- Changes in the contribution limits in the future. It uses the same yearly amount for every year.
- Taxes on withdrawals before age 59 and a half, or before the account has been open for 5 years. Early withdrawals of earnings can have taxes and penalties.
- A return that changes from year to year. Real markets go up and down.
- Fees on your account and funds.
This tool gives an estimate for general information only. It is not tax, legal or investment advice. The rules for IRAs are complex and change often. Check with the IRS or a tax adviser.