A Roth IRA is an individual retirement account where you contribute after-tax money, investments grow tax-free, and qualified withdrawals in retirement are also tax-free. You must meet IRS income and contribution limits to be eligible.

Is a Roth IRA better than a traditional IRA?

A Roth IRA is generally better if you expect your tax rate in retirement to be higher than it is today, or if you value tax-free withdrawals and no required minimum distributions. A traditional IRA can be better if you need the upfront tax deduction and expect a lower tax rate in retirement. The calculator lets you compare after-tax outcomes using your own tax assumptions.

Roth IRA Calculator

Q: How does this Roth IRA calculator work?

The calculator projects your Roth IRA balance by compounding your current balance and ongoing contributions at an assumed annual rate of return until retirement. It also estimates the total amount you contributed versus the investment growth and can compare the after-tax value of a Roth IRA to a traditional IRA using your expected retirement tax rate.

Q: What are the Roth IRA contribution limits?

For recent tax years, the annual Roth IRA contribution limit is typically the same as the traditional IRA limit and is indexed for inflation. There is an additional catch-up contribution allowed for people age 50 or older. High earners may be subject to income phase-outs that reduce or eliminate their ability to contribute directly to a Roth IRA.

Q: Are Roth IRA withdrawals really tax-free?

Qualified Roth IRA withdrawals are tax-free: the account must have been open at least 5 years and you must be 59½ or older, disabled, using up to $10,000 for a first-time home purchase, or deceased (beneficiary withdrawals). Non-qualified withdrawals may be subject to taxes and penalties on the earnings portion.

Project your tax-free Roth IRA balance, see how much of it is contributions vs growth, and compare Roth vs traditional IRA after-tax outcomes.

Roth IRA Projection

Current age

Retirement age

Current Roth IRA balance ($)

Annual contribution

This tool does not enforce income phase-outs; check IRS rules for your eligibility.

Annual contribution increase

Optional “raise” to your contribution each year.

Expected annual return (before inflation)

Expected inflation rate

2.5%

Used to show results in today’s dollars.

Roth vs Traditional IRA comparison

Current marginal tax rate

Retirement marginal tax rate

Used to estimate after-tax value of a traditional IRA with the same pre-tax contribution.

Projected Roth IRA at retirement

Future dollars

In today’s dollars (inflation-adjusted):

Total contributions

Investment growth (tax-free)

Roth vs Traditional IRA (after tax) Illustrative

Roth IRA (tax-free) $0

Traditional IRA (after retirement tax) $0

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Assumptions & notes

Contributions are made at the end of each year.
Returns are constant and reinvested; real markets are volatile.
Roth withdrawals are assumed qualified and tax-free.
Traditional IRA comparison assumes same pre-tax contribution and a flat retirement tax rate.

How the Roth IRA calculator works

This tool projects your Roth IRA balance by compounding your current balance and ongoing contributions between your current age and retirement age. It separates how much of your final balance comes from your own contributions versus investment growth, and then adjusts for inflation to show the value in today’s dollars.

Projection formula

For each year until retirement, the calculator applies:

1. Grow existing balance:

$ B_{t+1} = B_t \times (1 + r) $

2. Add contribution (with optional annual increase):

$ C_t = C_0 \times (1 + g)^t $

$ B_{t+1} = B_{t+1} + C_t $

where:

$ B_t $ = balance at year t
$ r $ = annual rate of return
$ C_0 $ = first-year contribution
$ g $ = annual contribution increase rate

To convert the future balance into today’s dollars, we discount by inflation:

$ B_{\text{real}} = \dfrac{B_{\text{future}}}{(1 + i)^n} $

$ i $ = annual inflation rate
$ n $ = years until retirement

Roth vs traditional IRA comparison

The comparison assumes you have the same pre-tax dollars available to save either in a Roth IRA or a traditional IRA:

With a Roth IRA, you pay tax now and invest the after-tax amount.
With a traditional IRA, you invest the full pre-tax amount, but pay tax on withdrawals later.

The calculator uses your current marginal tax rate to estimate how much of your contribution would reach a Roth account, and your retirement marginal tax rate to estimate how much of a traditional IRA balance you keep after taxes.

What is a Roth IRA?

A Roth IRA is an individual retirement account where you contribute money that has already been taxed. In exchange, your investments can grow tax-free and qualified withdrawals in retirement are also tax-free.

Key characteristics:

Contributions are after-tax (no deduction when you contribute).
Investment growth is tax-free if withdrawals are qualified.
Qualified withdrawals are tax-free after age 59½ and 5 years.
No required minimum distributions (RMDs) during the original owner’s lifetime.

Basic eligibility rules (high level)

The IRS sets annual contribution limits and income-based phase-outs for Roth IRA eligibility. These limits are adjusted periodically for inflation and differ if you are:

Single, head of household, or married filing separately
Married filing jointly or qualifying widow(er)

High earners may be able to use a “backdoor Roth” strategy via nondeductible traditional IRA contributions and Roth conversions, but that has additional tax and legal considerations.

When a Roth IRA can make sense

You expect your tax rate in retirement to be higher than it is today.
You value tax-free withdrawals and flexibility with no RMDs.
You are early in your career and expect income (and tax brackets) to rise.
You want to leave tax-free assets to heirs.

When a traditional IRA might be better

You need the upfront tax deduction now.
You expect a lower tax rate in retirement.
You are temporarily in a very high tax bracket this year.

Tips for using this Roth IRA calculator

Try different rates of return (e.g., 5%, 7%, 9%) to see a range of outcomes.
Adjust the contribution increase slider to model raises or step-ups in savings.
Experiment with different tax rate assumptions to see when Roth vs traditional wins.
Remember that real markets are volatile; this is a planning tool, not a guarantee.

Important disclaimer

This calculator is for educational and illustrative purposes only and does not provide tax, legal, or investment advice. Actual Roth IRA eligibility, contribution limits, and tax treatment depend on current law and your personal situation. Consider consulting a qualified tax professional or financial advisor before making decisions about retirement accounts.

Roth IRA FAQs

What is a Roth IRA?

A Roth IRA is an individual retirement account funded with after-tax dollars. You do not get a tax deduction when you contribute, but your investments can grow tax-free and qualified withdrawals in retirement are also tax-free.

How does this Roth IRA calculator work?

The calculator compounds your current balance and annual contributions at your chosen rate of return from now until your retirement age. It then discounts the result by your inflation assumption to show the value in today’s dollars and compares the after-tax value of a Roth IRA to a traditional IRA using your current and retirement tax rates.

What are the Roth IRA contribution limits?

The IRS sets an annual dollar limit on Roth IRA contributions, with an additional catch-up amount for people age 50 or older. Your ability to contribute directly to a Roth IRA may be reduced or eliminated at higher income levels. Always check the latest IRS guidance for current-year limits and phase-out ranges.

Are Roth IRA withdrawals really tax-free?

Qualified withdrawals are tax-free: the account must have been open at least 5 years and you must be 59½ or older, disabled, using up to $10,000 for a first-time home purchase, or deceased (beneficiary withdrawals). Non-qualified withdrawals may be subject to income tax and a 10% penalty on the earnings portion.

Does this calculator account for IRS income phase-outs?

No. The tool lets you enter any annual contribution amount for planning purposes and does not enforce income-based phase-outs or other eligibility rules. Use it to explore scenarios, then verify your actual contribution limits with the IRS or a tax professional.