Roth IRA Growth Calculator
Project your Roth IRA's tax-free growth over time based on annual contributions, expected return rate, and years until retirement.
A Roth IRA is a tax-advantaged individual retirement account where contributions are made with after-tax dollars — meaning withdrawals in retirement are completely tax-free, including all growth. This makes it extremely powerful for long-term investors.
The growth formula (compound interest): Future Value = P × (1 + r)^n + PMT × ((1 + r)^n − 1) / r
Where:
- P = initial balance (principal)
- PMT = annual contribution
- r = annual return rate (use historical stock market average: 7% real, 10% nominal)
- n = years until retirement
2024 Roth IRA contribution limits:
- Under age 50: $7,000/year
- Age 50 and over: $8,000/year (catch-up contribution)
- Income phase-out (single): $146,000–$161,000 MAGI
- Income phase-out (married filing jointly): $230,000–$240,000 MAGI
Worked example: 25-year-old contributes $7,000/year for 40 years (until 65), 7% average annual return, starting from $0: FV = 0 + 7,000 × ((1.07)^40 − 1) / 0.07 = 7,000 × (14.97 − 1) / 0.07 = 7,000 × 199.64 = $1,397,480
Total contributions: $7,000 × 40 = $280,000 Tax-free growth: $1,117,480
If started at age 35 instead (30 years): FV = 7,000 × ((1.07)^30 − 1) / 0.07 = $700,950
Starting 10 years earlier nearly doubles the outcome — the power of compounding.
Roth vs Traditional IRA: Roth wins if you expect to be in a higher tax bracket in retirement. Traditional wins if you expect to be in a lower bracket. For young earners in low brackets, Roth is almost always optimal.