Roth IRA Calculator

What this calculator computes

The form takes four numbers — an annual contribution, an assumed annual return, a number of years, and an optional current balance — and hands them to the same future-value function that powers the Investment Calculator on this site. Before the calculation starts, the annual contribution is divided by twelve and treated as a level monthly deposit, PMT. The return is divided by twelve to give a monthly rate r, the years are multiplied by twelve to give n months, and the current balance, if one is entered, is the principal P. The model then evaluates:

FV = P·(1+r)ⁿ + PMT·[((1+r)ⁿ − 1) / r]

The first term compounds any existing balance for the full horizon. The second is the standard annuity formula: it adds up n monthly deposits, each compounded only for the months remaining after it arrives. Deposits are placed at the end of each month, and the result is reported in nominal (future) dollars. A 0% return collapses the second term to PMT × n — plain addition — rather than dividing by zero.

Three lines come out. The balance is FV itself. Total contributed is P plus PMT × n, the money that went in. Growth is the difference, and the result box labels it tax-free growth because, as the accounts guide puts it, Roth contributions are made with after-tax money and qualified withdrawals are tax-free. That label describes the account type; it is not a step in the arithmetic. No tax rate is applied anywhere, and identical inputs in the Investment Calculator return identical figures.

In the baseline example — $7,000 a year at an assumed 6.5% return for 25 years, starting from nothing — the model projects a balance of about $436,821: $175,000 contributed and $261,821 of growth, so growth makes up 59.9% of the ending value. Every result on this page — each balance, contribution total, growth figure and share — is computed at build time by the tested engine behind the form; none is typed in by hand.

Reading the growth share

The most informative reading of the output is not the balance but the proportion of it that growth supplies, because that proportion is what the Roth label attaches to. It is a share of the ending value, not an annual rate, and it is set by the rate and the horizon together — the two tables below vary each one on its own. In the baseline, growth is already larger than the contributions: $261,821 against $175,000. A rough check on why comes from the Rule of 72, an approximation the accounts guide also uses — dividing 72 by the annual rate estimates the years a sum takes to double. At 6.5% that is about 11.1 years, so a 25-year horizon holds roughly 2.3 doublings for the first deposit and none at all for the last one. The growth share is the average across that whole ladder of deposits, which is why it sits well below what the first dollar alone would show.

The same contribution at three horizons

Holding the contribution at $7,000 a year and the assumed return at 6.5%, the horizon alone is changed in the table below. Each row is a separate run of the engine:

The 40-year horizon is four times the 10-year one, yet the projected balance is about 13.6 times larger. The reason is in the annuity term: every deposit carries its own exponent, so extending the horizon does not simply bolt on another block of the same size — it also gives each earlier deposit more months of compounding. Over ten years the contributions dominate and growth is 28.7% of the balance; over forty, growth is 79.0%. This is the mechanical reason that, across the runs on this page, the years field moves the result further than the rate or the contribution does, and it is why the share of the balance that carries the tax-free label rises with the horizon: the growth slice is the slice that grows fastest at the end.

Changing the contribution

With no starting balance, the contribution is a plain multiplier. PMT sits outside the bracket in the annuity term, so scaling it scales the balance, the total contributed, and the growth by the same factor. A $3,000-a-year contribution over the same 25 years at 6.5% projects $187,209 — 42.9% of the baseline balance, which is exactly $3,000 ÷ $7,000. The growth share is identical in both runs: 59.9% against 59.9%. The contribution field sets the scale of the projection; the rate and the horizon set its shape.

Adding a current balance

The optional balance field feeds the first term of the formula, and that term is independent of the second. Starting the baseline from $20,000 instead of nothing raises the projected balance to $537,945, a difference of $101,123.96. Compounding $20,000 on its own — monthly, at the same 6.5% for the same 25 years, with no deposits — gives $101,123.96. The two figures agree to within rounding because the lump sum and the deposit stream never interact; the model adds them. The growth share rises to 63.8%, since the starting balance has the entire horizon to compound while the deposits arrive throughout it.

Changing the return assumption

The rate is the one input the tool cannot know. It is an assumption the example chooses, and the table below runs the baseline contribution and horizon under four of them, including a 0% return — where the annuity term degrades to plain addition and the balance equals the contributions to the dollar:

Two conventions sit underneath every row. The return is constant: one number stands in for 25 years of results that, in a real account, would vary from year to year and arrive in an order the model does not simulate. And the balance is in nominal dollars — future dollars, not today's purchasing power. Entering a real (after-inflation) return instead of a nominal one produces a projection in today's dollars; the methodology page explains both conventions, and the Inflation Calculator shows what a chosen inflation assumption does to purchasing power on its own.

How much the monthly-spreading convention matters

Dividing the annual contribution by twelve is a modeling choice, not a description of how any particular account is funded. The engine can bracket how much that choice moves the result. Deposits at the end of each month — the convention this tool uses — project the baseline $436,821. Deposits at the beginning of each month, an engine option this form does not expose, multiply the annuity term by one month's growth factor and project $439,187. One whole $7,000 deposit every January, computed as 25 separate lump sums each compounded monthly for its own remaining years and then summed, projects $452,353. The distance from the tool's figure to the January figure is about 3.6% of the balance, and that is the full size of what the spreading convention can move at this horizon. The tool reports the lowest of the three because it gives each dollar the least time.

What the model does not do

Taxes. The calculator performs no tax arithmetic. The tax-free label on the growth line rests on the qualified-withdrawal condition, which this site does not define and irs.gov publishes, and the tool does not test that condition: it does not know the account owner's age or whether a withdrawal will be qualified. The Retirement Age Milestones guide notes that distributions from most tax-advantaged retirement accounts before age 59½ generally face a 10% additional federal tax on top of any ordinary income tax that applies, with exceptions the tax code lists and irs.gov documents; none of that enters the projection. Nor does the tool compute what the same dollars would be worth in a traditional account, where withdrawals are generally taxed as ordinary income, or in a taxable brokerage account, which pays tax along the way. Those comparisons depend on rates the model does not contain, and the retirement accounts guide lays out the mechanics without guessing at them.

Contribution limits and income eligibility. The form accepts any annual amount. The IRS adjusts IRA contribution limits annually, which is why this page quotes none, and whether a given person may contribute to a Roth IRA at all is governed by IRS eligibility rules the tool does not check. Both are published at irs.gov. The arithmetic is equally valid for an amount the rules would not permit; the projection simply does not know the difference.

Withdrawals and required distributions. The projection stops at the horizon. Roth IRAs have no lifetime required minimum distributions for the original owner, so no forced drawdown is modeled; the traditional-account regime that begins at age 73 is covered in RMD Rules Explained. Turning an ending balance into an income figure is a separate calculation — the Retirement Withdrawal Calculator and The 4% Rule guide cover it.

Fees, inflation, and the order of returns. Investment fees are not subtracted; a fee reduces the effective return, which the rate field can absorb. Inflation is not applied unless a real return is entered. And a constant return cannot show what a run of poor years near the end of the horizon does to the balance — sequence-of-returns risk, which the methodology page names as a limit of every projection on this site. The other side of a Roth decision — a 401(k) with an employer match, or a traditional IRA — is modeled by the 401(k) Calculator and the Retirement Planner; the full set of explainers is under Guides.

Common misreadings

A monthly figure in the annual field. The tool divides whatever it receives by twelve. Entering the baseline's monthly amount as if it were annual divides it a second time, and the projection comes back at $36,402 — one twelfth of the intended $436,821, with the growth share unchanged, because scaling PMT scales every line together.

A return entered as a decimal. The rate field expects a percentage: 6.5 means 6.5% a year. Entered as 0.065, the engine reads 0.065% and the baseline projects $176,425 — barely above the $175,000 contributed. A balance that hardly exceeds the total contributed, over a long horizon, is the signature of this entry.

The growth share read as a return. 59.9% in the baseline is the fraction of the ending balance that growth supplies, accumulated over 25 years. It is not an annual rate and cannot be compared with one.

The balance read as spendable money. The figure is in future dollars, and the tax-free description applies to qualified withdrawals — a condition this site does not define and irs.gov publishes. The model does not check either the calendar or the condition.

Tax-free growth read as a tax saving. The growth line is a slice of the balance, not the tax avoided on it. How much a Roth saves relative to a traditional or taxable account depends on rates that apply at contribution and at withdrawal — rates the model does not contain and this site does not guess. The projection shows the size of the slice; the accounts guide explains why the account type determines what happens to it.

Frequently asked questions

Not financial advice: a general educational estimate that assumes a constant return and does not enforce IRS contribution or income limits, which change yearly — verify current limits at irs.gov. Values are processed locally in your browser and never transmitted. See the methodology page.