Project the tax-free growth of your Roth IRA balance and compare it to an equivalent taxable account at retirement.
2025 IRA contribution limit (example)
A Roth IRA calculator projects how your Roth IRA balance could grow between now and retirement, then shows the value of that tax-free growth by comparing it to an equivalent balance in a taxable account. Because qualified Roth IRA withdrawals in retirement are generally tax-free, this calculator highlights the "tax savings" advantage of a Roth account compared to a similar account where withdrawals would be taxed at your marginal rate.
This calculator compounds monthly: each month, growth is calculated on the current balance at your expected rate of return, then one-twelfth of your annual contribution is added before the next month's growth is calculated, repeated for every month until retirement.
Formula: Balance = Balance × (1 + monthly rate) + monthly contribution, where monthly rate = annual return rate ÷ 12. The taxable-equivalent comparison is: Equivalent Taxable Balance = Roth Balance × (1 − marginal tax rate), with Tax Savings = Roth Balance − Equivalent Taxable Balance.
Example: Starting with a $10,000 balance at age 30, contributing $7,000 per year (2025 contribution limit example — check current IRS limits and Roth income eligibility) until age 65, with a 7% expected annual return (example rate — enter your expected rate), grows to a projected Roth balance. Comparing that to an account taxed at a 22% marginal rate at withdrawal (example rate — for comparison) shows the dollar value of the Roth's tax-free treatment. (Note: all figures in this example are for illustration purposes only and do not represent guaranteed returns or tax outcomes.)
A Roth IRA is funded with after-tax contributions — you don't get a tax deduction when you contribute, but qualified withdrawals of both contributions and earnings in retirement are generally tax-free, provided you're at least 59½ and have held the account for at least 5 years. Roth IRAs also have income limits that determine eligibility to contribute directly (2025 example — check current IRS income thresholds, as these are adjusted periodically and phase out at higher incomes). Unlike Traditional IRAs, Roth IRAs are generally not subject to Required Minimum Distributions (RMDs) during the original owner's lifetime, which can make them useful for estate planning as well as retirement income.
Roth IRA contributions are made with after-tax dollars and don't reduce your taxable income now, but qualified withdrawals in retirement are generally tax-free. Traditional IRA contributions may be tax-deductible now, but withdrawals are taxed as ordinary income in retirement.
Yes. Roth IRA eligibility phases out above certain income thresholds, which are adjusted periodically by the IRS. If your income is too high to contribute directly, some people use a "backdoor Roth" conversion strategy — consult a tax professional for your specific situation.
The default 7% is an example only. Actual returns depend on what your Roth IRA is invested in — stock funds, bond funds, target-date funds, and cash equivalents all have very different typical returns and risk levels.
It's used only for comparison — it estimates what an equivalent balance would be worth after tax in a taxable account, to illustrate the value of the Roth IRA's tax-free withdrawal treatment. The default 22% is an example only; use a rate that reflects your expected tax bracket in retirement.
Generally no. Unlike Traditional IRAs, Roth IRAs are typically not subject to RMDs during the original owner's lifetime, which can make them useful for leaving assets to heirs as well as for your own retirement income.
Qualified withdrawals are generally tax-free and penalty-free once you're at least 59½ and have held the account for at least 5 years. Contributions (but generally not earnings) can often be withdrawn earlier without penalty — but rules are nuanced, so consult a tax professional before withdrawing early.
Disclaimer: The information, rates, contribution limits, and figures provided on this page are for educational and illustrative purposes only. All rates, limits, and examples shown are sample values and may not reflect current IRS rules, income eligibility limits, or guaranteed investment returns. Financial rules and regulations change frequently. Always consult a qualified financial advisor or tax professional before making any financial decisions.