Roth IRA Calculator
Contributions plus growth — and none of it taxed when you withdraw.
How this is calculated
FV = P(1+r)ⁿ + D × ((1+r)ⁿ − 1) ÷ r r = return ÷ 12, n = years × 12, D = monthly
Worked example: $10,000 plus $500/month at 7% for 30 years → roughly $700,000, and in a Roth every cent is yours tax-free. Start earlier and the growth portion balloons.
The trade is when you pay tax, not whether
A Roth is funded with money that has already been taxed, and qualified withdrawals — after 59½ and five years — are tax free, including all the growth. A traditional account reverses it: the contribution is deductible now and everything is taxed on withdrawal. The choice therefore turns on one comparison: your marginal rate today against your expected marginal rate in retirement. Roth wins if your rate rises, traditional wins if it falls, and if they are equal the two are mathematically identical.
Most people cannot know their future rate, which is an argument for holding some of each. Tax diversification lets you draw from whichever account is cheaper in a given year, and that flexibility has value regardless of which way rates move.
The features that are not about tax
Roth contributions — though not earnings — can be withdrawn at any time without tax or penalty, which makes it function as a secondary emergency reserve in a way a traditional account cannot. Roths also have no required minimum distributions during the owner's lifetime, so the balance can keep compounding untouched, which matters for estate planning. Both are frequently the deciding factors for people whose expected tax rates are a coin toss.
Limits, phase-outs and the back door
Annual contribution limits are set by statute and adjusted for inflation, with an additional catch-up amount from age 50. Direct contributions phase out above income thresholds that depend on filing status. A backdoor Roth — contributing to a traditional account and converting — is a widely used route above those thresholds, and it interacts with the pro-rata rule across all traditional balances in a way that can produce an unexpected tax bill. Check the current year's figures and take advice before converting a meaningful amount.
This calculator models growth and the tax treatment at a rate you supply. It is US-specific, and it is not tax advice.
Frequently asked questions
What makes a Roth different?
You contribute after-tax money, and qualified withdrawals in retirement — including all the growth — are completely tax-free. The growth maths is the same as any investment; the advantage is that the taxman never touches the final number.
Are there contribution limits?
Yes — the IRS caps annual Roth IRA contributions, and eligibility phases out at higher incomes. This projects growth from the amounts you enter; check the current year’s limit before setting your monthly.