RETIREMENT
Roth IRA Calculator \u2014 Tax-Free Growth
By Worldtickers ·
Use our free Roth IRA calculator to estimate how your after-tax contributions grow into tax-free retirement income. Model different scenarios and see the power of tax-free compounding.
This roth ira calculator \u2014 tax tool focuses on use our free Roth IRA calculator to estimate how your after-tax contributions grow into tax-free retirement income. Model different scenarios and see the power of tax-free compounding. Use it to estimate retirement targets, contribution needs, withdrawal assumptions, and long-term income scenarios while adjusting savings rates, return assumptions, time horizons, and spending goals.
Roth IRA Calculator
Roth IRA Calculator
Project your Roth IRA value with tax-free growth and withdrawals.
What Is a Roth IRA?
A Roth IRA is a personal retirement savings account where you contribute after-tax dollars and your investments grow completely tax-free. Unlike a Traditional IRA, you do not get a tax deduction when you contribute, but you never pay taxes on the investment gains, and qualified withdrawals in retirement are entirely tax-free.
The Roth IRA was created by the Taxpayer Relief Act of 1997 and named after Senator William Roth. It has become one of the most popular retirement accounts in the United States because of its unique combination of tax-free growth, flexible withdrawal rules, and no Required Minimum Distributions during the owner's lifetime.
The power of a Roth IRA lies in the tax-free compounding. When your investments earn dividends, interest, and capital gains, those returns are reinvested and earn more returns \u2014 all without being reduced by annual taxes. Over decades, this tax-free compounding can result in significantly more wealth compared to a taxable account.
How to Use This Calculator
Enter your current age, monthly contribution, expected rate of return, and retirement age. The calculator projects the future value of your Roth IRA and shows how much tax-free retirement income it can generate.
Current Age
Enter your current age. The younger you are when you start, the more time your Roth IRA has to benefit from decades of tax-free compound growth.
Monthly Contribution
Enter how much you plan to contribute each month. For 2026, the maximum is $7,000 per year ($583/month) if under 50, or $8,000 per year ($667/month) if 50 or older.
Expected Rate of Return
Enter the annual return you expect from your investments. A diversified stock portfolio has historically returned 7\u201310% per year. Since Roth IRA gains are never taxed, the effective return is higher than the same return in a taxable account.
Retirement Age
Enter the age at which you plan to start withdrawing from your Roth IRA. Withdrawals are tax-free and penalty-free after age 59\u00bd, provided the account has been open for at least 5 years.
Formula
The Roth IRA calculator uses the future value of an annuity formula:
FV = PMT \u00d7 [((1 + r)^n \u2212 1) / r]
Where FV is the future value of your Roth IRA,PMT is your monthly contribution, r is the monthly rate of return (annual / 12), and n is the total number of months until retirement.
Unlike a Traditional IRA or taxable account, the entire future value is yours to keep tax-free. There is no tax adjustment needed. This means $1 million in a Roth IRA is worth $1 million after taxes, while $1 million in a Traditional IRA might be worth $750,000 after taxes (assuming a 25% tax rate in retirement).
Examples
Example 1: Starting at Age 25
You are 25 and contribute $500 per month to a Roth IRA at a 7% annual return. By age 65, your Roth IRA holds approximately $1.2 million \u2014 all tax-free. You contributed $240,000 in total, and the remaining $960,000 is investment growth that you will never pay taxes on. At a 4% withdrawal rate, this generates about $48,000 per year in tax-free retirement income.
Example 2: Starting at Age 35
You are 35 and contribute $583 per month (max contribution) at a 7% return. By age 65, your Roth IRA holds approximately $720,000. That is $480,000 in contributions and $240,000 in tax-free growth. While starting 10 years later reduces the total by about $480,000 compared to starting at 25, the tax-free benefit is still substantial.
Example 3: Roth vs Traditional Comparison
Two investors each contribute $6,000 per year for 30 years at 7%. Investor A uses a Roth IRA. Investor B uses a Traditional IRA and is in the 24% tax bracket in retirement. Both accounts grow to $606,000. Investor A withdraws the full $606,000 tax-free. Investor B pays 24% tax on withdrawals, keeping only $461,000. The Roth IRA provides $145,000 more in after-tax retirement income.
Tips
Start Contributing as Early as Possible
Roth IRA benefits are maximized by time. The longer your money grows tax-free, the larger the advantage over taxable accounts. A 25-year-old who invests $500 per month for 40 years at 7% builds approximately $1.2 million tax-free. Waiting until 35 to start the same contributions yields only $720,000 \u2014 a difference of nearly half a million dollars from just 10 years of delay.
Use the Backdoor Roth If You Exceed Income Limits
If your income is too high to contribute directly to a Roth IRA, you can use the backdoor strategy: contribute to a non-deductible Traditional IRA and convert it to a Roth. This is a widely used and IRS-sanctioned approach. Consult a tax professional to ensure you handle the conversion correctly, especially if you have existing pre-tax IRA balances.
Consider Roth for Young Workers in Low Tax Brackets
If you are early in your career and in a lower tax bracket, paying taxes now (Roth) rather than later (Traditional) is usually the better strategy. Your tax rate in retirement will likely be higher than it is now, making the Roth IRA the more tax-efficient choice.
Remember the 5-Year Rule
To withdraw earnings tax-free, your Roth IRA must have been open for at least 5 years. The clock starts January 1 of the year you make your first contribution. Open a Roth IRA as soon as possible, even with a small amount, to start the 5-year clock.
FAQ
What is a Roth IRA?
A Roth IRA is a personal retirement savings account funded with after-tax dollars. Your contributions grow tax-free, and qualified withdrawals in retirement are also tax-free. Unlike a Traditional IRA, there is no tax deduction when you contribute, but you never pay taxes on the investment gains as long as you follow the withdrawal rules.
What are the Roth IRA income limits for 2026?
For 2026, the ability to contribute directly to a Roth IRA phases out at higher income levels. Single filers can contribute the full amount if their modified adjusted gross income (MAGI) is below $150,000, with partial contributions allowed up to $165,000. Married filing jointly filers can contribute fully below $236,000, with partial contributions up to $246,000.
What are the Roth IRA contribution limits for 2026?
For 2026, the annual contribution limit for a Roth IRA is $7,000 if you are under age 50. If you are 50 or older, you can contribute an additional $1,000 catch-up, for a total of $8,000. These limits apply to the combined total of all your IRA contributions (Roth and Traditional).
What is a backdoor Roth IRA?
A backdoor Roth IRA is a legal strategy for high-income earners who exceed the Roth IRA income limits. You contribute to a non-deductible Traditional IRA (which has no income limit) and then convert it to a Roth IRA. The conversion is tax-free if you have no other pre-tax IRA balances. This strategy has been used by millions of higher-income savers.
Can I withdraw my Roth IRA contributions at any time?
Yes. Because you contributed after-tax money, you can withdraw your direct contributions (not earnings) at any time, for any reason, without taxes or penalties. This makes a Roth IRA a flexible savings vehicle that can double as an emergency fund of last resort. However, withdrawing earnings before age 59½ and before the account is 5 years old may result in taxes and penalties.
What is the 5-year rule for Roth IRAs?
The 5-year rule states that you must have had any Roth IRA for at least 5 years before you can withdraw earnings tax-free, regardless of your age. The clock starts on January 1 of the year you made your first Roth IRA contribution. For example, if you open your first Roth IRA in November 2026, the 5-year period begins January 1, 2026 and ends December 31, 2030.
Are there Required Minimum Distributions for Roth IRAs?
No. Roth IRAs are not subject to Required Minimum Distributions (RMDs) during the account owner’s lifetime. This is a significant advantage over Traditional IRAs and 401k plans, which require you to start taking distributions at age 73. You can let your Roth IRA grow for your entire lifetime and pass it to your heirs tax-free.
Can I contribute to both a Roth IRA and a 401k?
Yes. You can contribute to both a Roth IRA and a 401k in the same year. The contribution limits are separate. Many financial advisors recommend this strategy: contribute enough to your 401k to get the full employer match, then maximize your Roth IRA, and then contribute more to your 401k if you have additional funds to save.
Should I choose a Roth IRA or Roth 401k?
Both provide tax-free withdrawals in retirement. A Roth IRA has no RMDs and more flexible investment options. A Roth 401k has higher contribution limits ($23,500 vs $7,000 for 2026). If you have access to both, consider contributing to the Roth 401k for the higher limit and a Roth IRA for the flexibility and no-RMD benefit.
Is a Roth IRA good for young investors?
A Roth IRA is especially powerful for young investors because you have decades for your tax-free growth to compound. A 25-year-old who contributes $6,000 per year at 7% return will have approximately $1.2 million tax-free by age 65. Young investors are typically in lower tax brackets, so paying taxes now (Roth) rather than later (Traditional) often results in a better outcome.