Roth IRA Calculator: Estimate Your Tax-Free Retirement Savings
A Roth IRA calculator helps you estimate how much your retirement savings can grow tax-free over time based on your contributions, current balance, and expected investment returns. Unlike a traditional IRA, Roth IRA contributions are made with after-tax dollars, meaning all qualified withdrawals in retirement are completely tax-free. Use this tool to project your future balance, total contributions, and the significant tax advantages a Roth IRA can provide.
Your current age in years.
The age at which you plan to retire.
Amount you contribute to your Roth IRA each year. The 2024 limit is $7,000 ($8,000 if age 50+).
Your existing Roth IRA balance, if any.
Estimated average annual investment return. Historically, the stock market has averaged around 7% after inflation.
How often you make contributions to your Roth IRA.
Your current federal income tax rate. Used to estimate tax savings compared to a traditional IRA.
Your results will appear here
How to Use This Calculator
1. Enter your current age and the age at which you plan to retire. 2. Input your planned annual contribution amount — the 2024 limit is $7,000 per year ($8,000 if you are 50 or older). 3. Enter your current Roth IRA balance if you already have one, or leave it at zero if you are starting fresh. 4. Set your expected average annual investment return — 7% is a common estimate based on historical stock market averages after inflation. 5. Choose whether you contribute monthly or annually. 6. Enter your current marginal tax rate to estimate the tax savings benefit of your Roth IRA. 7. Click Calculate to see your projected retirement balance, total contributions, investment earnings, and estimated tax savings.
How a Roth IRA Works
A Roth IRA (Individual Retirement Account) is a tax-advantaged retirement savings account available to individuals with earned income in the United States. Contributions are made with after-tax dollars, which means you do not get a tax deduction now, but your money grows tax-free and qualified withdrawals in retirement are entirely tax-free.
Roth IRA Contribution Limits (2024)
For 2024, the maximum annual contribution is $7,000 per year. If you are age 50 or older, you can contribute an additional $1,000 as a catch-up contribution, for a total of $8,000. Contribution eligibility phases out at higher income levels:
- Single filers: Phase-out begins at $146,000 MAGI, eliminated at $161,000
- Married filing jointly: Phase-out begins at $230,000 MAGI, eliminated at $240,000
The Future Value Formula
This calculator uses the future value of an annuity formula to project your Roth IRA growth:
FV = P × (1 + r)^n + C × [((1 + r)^n − 1) / r]
- P = Current balance (principal)
- r = Annual (or monthly) interest rate as a decimal
- n = Number of years (or months) until retirement
- C = Annual (or monthly) contribution amount
Monthly vs. Annual Compounding
When contributing monthly, the formula uses a monthly interest rate (annual rate ÷ 12) and the number of months instead of years. Monthly contributions can result in slightly higher balances due to more frequent compounding of returns.
Tax-Free Growth Advantage
The most powerful aspect of a Roth IRA is the tax-free compounding. Because you never pay taxes on the earnings, every dollar of investment growth stays in your account and continues to compound. Over decades, this can result in tens or even hundreds of thousands of dollars in additional retirement wealth compared to taxable accounts.
Roth IRA vs. Traditional IRA
- Roth IRA: Contributions are after-tax; withdrawals in retirement are tax-free.
- Traditional IRA: Contributions may be tax-deductible; withdrawals in retirement are taxed as ordinary income.
- If you expect to be in a higher tax bracket in retirement, a Roth IRA is generally more advantageous.
- Roth IRAs have no required minimum distributions (RMDs), giving you more flexibility.