Roth IRA Growth Calculator
Project your Roth IRA balance with annual contributions and investment returns. See tax-free growth, total contributions, and estimated tax savings vs. a taxable account — with a year-by-year growth chart.
How to use this tool
- Enter annual contribution, expected annual return and years to grow in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your projected roth ira balance and the full breakdown beneath it.
A Roth IRA uses after-tax contributions, so all growth and qualified withdrawals are completely tax-free. That tax-free compounding is extremely valuable over decades of growth.
⚠ This tool provides general estimates for education only and is not financial, tax or legal advice. Figures may not reflect your situation — verify with a qualified professional.
Formula
Annual contribution is capped at the IRS limit ($7,000): Cannual = min(input, 7000). Monthly contribution: C = Cannual / 12.
Future value (monthly compounding): FV = C × ((1 + i)m − 1) / i, where i = annual rate / 12, m = years × 12. Estimated tax savings: FV × 0.22 (22% bracket proxy).
How it works
This calculator projects Roth IRA growth by converting an annual contribution (capped at the 2024 IRS limit of $7,000) into equal monthly deposits and compounding them at the expected annual return rate. Because qualified Roth withdrawals are tax-free, the tool estimates the tax benefit by applying a 22% rate to the final balance as a rough illustration.
The 22% tax savings estimate is illustrative only; your actual marginal rate at withdrawal may differ significantly. Roth income eligibility limits, catch-up contributions for those aged 50+, and state taxes are not modelled here.
Worked example
- Inputs: $1,200 annual contribution, 0% expected return, 1 year.
- Contribution capped at min($1,200, $7,000) = $1,200; monthly contribution = $1,200 / 12 = $100.
- At 0% return over 12 months: FV = $100 × 12 = $1,200.
- Tax-free growth = $1,200 − $1,200 = $0.
Projected Roth IRA balance: $1,200 | Total contributed: $1,200 | Tax-free growth: $0
Common mistakes to avoid
- Contributing the IRS limit without checking income phase-out thresholds — high earners may be partially or fully ineligible for direct Roth IRA contributions.
- Comparing Roth tax savings to a taxable account at today's tax rate rather than the expected retirement rate, which changes the analysis if you expect to be in a lower bracket later.
- Treating the $7,000 cap as a per-account limit when it is actually a per-person limit across all IRAs combined.
Key terms
- Roth IRA
- An individual retirement account funded with after-tax dollars; qualified withdrawals in retirement are completely tax-free, including earnings.
- IRS contribution limit
- The maximum amount you can contribute to a Roth IRA in a given tax year ($7,000 for 2024; $8,000 if age 50+).
- Tax-free growth
- Investment earnings inside a Roth IRA that are never subject to income tax, as long as the withdrawal is qualified.
- Qualified withdrawal
- A Roth IRA distribution that meets IRS rules (account at least 5 years old and owner at least 59½), making it fully tax- and penalty-free.
- After-tax contribution
- Money placed in a Roth IRA after you have already paid income tax on it, which is why future growth and withdrawals are tax-free.
Frequently asked questions
- What is the 2024-2025 Roth IRA contribution limit?
- The limit is $7,000/year ($8,000 if age 50+). Income limits also apply — consult IRS.gov or a tax advisor for current phase-out thresholds.
- How is this different from a traditional IRA?
- Traditional IRA contributions may be tax-deductible now but withdrawals are taxed. Roth contributions are after-tax but withdrawals are tax-free. Roth usually wins if you expect to be in a higher bracket in retirement.