Roth IRA Calculator

A Roth IRA is a US individual retirement account funded with after-tax dollars. Because contributions are not tax-deductible, qualified withdrawals in retirement — including all the accumulated earnings — are completely free of federal income tax. A traditional IRA is the opposite: contributions may be deductible now, but withdrawals in retirement are taxed as ordinary income. The Roth IRA advantage grows over time: the longer your money compounds tax-free, the larger the benefit over a taxable or traditional account.

The calculator uses the standard future-value formula: FV = P·(1+r)^n + PMT·[((1+r)^n − 1) / r], where P is your starting balance, PMT is your annual contribution, r is the expected annual return (as a decimal), and n is the number of years until retirement. Your starting balance compounds at r for n years, and your annual contributions accumulate as an ordinary annuity (end-of-year) or annuity due (start-of-year). Because Roth IRA distributions are tax-free, the projected FV is your after-tax retirement value — no further tax haircut is needed.

For 2024 and 2025 the annual IRA contribution limit is $7,000 for those under age 50 and $8,000 for those 50 or older (the $1,000 catch-up contribution). For 2026 the IRS raised the limit to $7,500 ($8,500 with catch-up). These limits apply across all your traditional and Roth IRAs combined — you cannot exceed the cap by splitting contributions across multiple accounts. This calculator does not automatically enforce the limit; you can enter any contribution to model what-if scenarios.

Eligibility to contribute directly to a Roth IRA phases out above certain Modified Adjusted Gross Income (MAGI) thresholds. For 2025 (single filers): full contribution is allowed below $150,000; the allowed amount reduces to zero at $165,000. For married filing jointly: phase-out runs from $236,000 to $246,000. For 2026: single $153,000–$168,000; married filing jointly $242,000–$252,000. Above the upper limit no direct Roth IRA contribution is allowed (though a backdoor Roth conversion may be an option). These thresholds are adjusted annually by the IRS for inflation.

End-of-year (ordinary annuity) means each annual contribution is invested on the last day of the year — which is the default and the more conservative assumption. Start-of-year (annuity due) means each contribution is invested on January 1 of that year, giving it one extra year to compound. In practice the difference is exactly a factor of (1 + r): starting-year contributions produce a balance about 7% higher at a 7% return. Maxing out your Roth IRA early in the year is a common strategy to capture this extra compounding.

A qualified Roth IRA distribution is federally income-tax-free. A distribution is qualified when the account has been open for at least five years AND you are at least age 59½ (or the distribution meets another qualifying condition such as death, disability, or a first-time home purchase up to $10,000). Because no federal income tax is due on a qualified distribution, the projected future value is your true after-tax retirement wealth — unlike a traditional IRA or taxable account where a portion would be owed to the government.

The S&P 500 has delivered an annualized total return of roughly 10–11% before inflation over long historical periods. Adjusted for an average inflation rate of about 3%, the real (inflation-adjusted) annualized return has been approximately 7%. Using 7% is therefore a common convention for long-horizon retirement projections as a real-return estimate, though the nominal rate is often higher. Actual returns vary significantly year-to-year and are not guaranteed. Consider using a range of rates — for example 5%, 7%, and 9% — to understand the sensitivity of your projected balance.

At a 7% annual return and the current $7,000 annual limit, contributing from age 30 to 65 (35 years) projects to approximately $967,658 at retirement — roughly $245,000 in contributions and $722,658 in tax-free growth. If limits increase in future years (the 2026 limit is $7,500), the balance would be higher. The exact outcome depends on actual returns, contribution amounts and timing — but the power of 35 years of compounding in a tax-free account is substantial.

Yes. A Roth IRA and a workplace 401(k) or 403(b) are separate accounts with separate contribution limits. For 2025 the 401(k) limit is $23,500 ($31,000 with catch-up for age 50+), entirely separate from the $7,000 Roth IRA limit. Contributing to both allows you to build both pre-tax (traditional 401k) and post-tax (Roth IRA) retirement assets, which provides tax diversification in retirement.

If your MAGI exceeds the upper phase-out threshold you cannot contribute directly, but a strategy called a 'backdoor Roth IRA' is widely used: contribute to a non-deductible traditional IRA (no income limit) and then convert it to a Roth IRA. The converted amount is subject to tax only on any pre-tax dollars (none if you had no prior traditional IRA balances). A backdoor Roth conversion is a legal strategy but involves tax complexity — consult a tax professional before executing it.

The projection formula does not enforce the 5-year holding rule; it projects your balance assuming all withdrawals are qualified. For qualified tax-free treatment both conditions must be satisfied: (1) the Roth IRA must have been open for at least five tax years from the date of your first Roth IRA contribution, and (2) you must be at least 59½ (or meet another qualifying event). Contributions (not earnings) can always be withdrawn at any time without tax or penalty — only earnings are subject to the 5-year rule and the age-59½ requirement.

The formula is mathematically exact for the inputs given. However, the projection assumes a constant annual return, equal annual contributions, no missed years, no early withdrawals, and annual compounding — a simplified model of how real Roth IRAs behave. Actual returns vary year-to-year, contribution limits change annually, and life events may disrupt contributions. Treat the result as an illustrative estimate of what consistent saving at a steady rate could produce, not a guaranteed outcome. Use a range of return scenarios to stress-test your plan.

No. During the account owner's lifetime, a Roth IRA is not subject to Required Minimum Distributions. This is a significant advantage over a traditional IRA, which requires you to start withdrawing a minimum amount each year once you reach age 73 (under current law). Because no RMDs are forced on a Roth IRA, you can let the account compound untouched for as long as you live — or pass the entire balance to your heirs. Note that beneficiaries who inherit a Roth IRA are generally subject to distribution rules (typically a 10-year window to empty the account for non-spousal heirs under the SECURE Act), though those distributions are still income-tax-free.

A Roth IRA can be left to a named beneficiary. Distributions a beneficiary receives from an inherited Roth IRA are generally federal-income-tax-free, because the contributions were already taxed. Non-spousal beneficiaries (other than certain eligible designated beneficiaries such as minor children or a person with a disability) must fully distribute the inherited account within 10 years of the owner's death under the SECURE Act 10-year rule — but those distributions are not taxed. A surviving spouse has additional options, including treating the inherited account as their own Roth IRA. Inherited IRA rules are complex and changed significantly with the SECURE Act (2019) and SECURE 2.0 (2022); consult a tax professional for guidance specific to your situation.

Yes, if your income is below the threshold. The Retirement Savings Contributions Credit — commonly called the Saver's Credit — lets eligible low- and moderate-income savers claim a credit of 10%, 20%, or 50% of the first $2,000 contributed to a Roth or traditional IRA (or employer retirement plan). For 2025, the income ceiling is $39,500 for single filers, $59,250 for heads of household, and $79,000 for married filing jointly. Because the Roth IRA MAGI phase-out starts at $150,000 for single filers in 2025, many savers below the Saver's Credit ceiling are also eligible to contribute to a Roth IRA. The credit is non-refundable and cannot exceed your tax liability for the year. Beginning in 2027, the SECURE 2.0 Act replaces the credit with a Saver's Match — a government contribution to your retirement account instead of a tax credit.