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CalcMyWay

Roth IRA Calculator

Your details

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Result

Balance at retirement

$1,125,134
Total you contributed
$272,500
Tax-free growth
$852,634
Same money in a taxable account
$801,025
What the Roth shelter is worth
$324,109
Years of contributions
33
2026 contribution limit for your age
$7,500
  • The Roth ends $324,109 ahead of the same contributions in a taxable account at a 22% tax rate. That difference is the entire value of the tax shelter, and it compounds — the gap widens every year.
Contributions versus tax-free growth

Roth versus taxable, year by year

The same contributions in a Roth IRA and in a taxable brokerage account.

AgeContributedRoth IRATaxable account
33$7,500$34,250$33,865
34$7,500$44,148$43,214
35$7,500$54,738$53,074
36$7,500$66,069$63,471
37$7,500$78,194$74,437
38$7,500$91,168$86,001
39$7,500$105,050$98,197
40$7,500$119,903$111,058
41$7,500$135,796$124,622
42$7,500$152,802$138,926

How is Roth IRA growth calculated?

Roth IRA growth is calculated by compounding the balance at the expected rate of return each year and adding that year's contribution. Because contributions are made with after-tax money, no tax is applied to the growth, so the balance at retirement is what you keep.

B⁺ = B(1 + r) + C subject to C ≤ L(age)
B
Balance at the start of the year
r
Expected annual rate of return
C
Annual contribution
L(age)
The IRS limit, which rises at age 50

The projection is ordinary compounding with one contribution a year, and the whole point is what is absent from the formula: there is no tax term. A Roth is funded with money you have already paid income tax on, so nothing is owed on the growth or on qualified withdrawals. That is why the comparison against a taxable brokerage account is the most useful figure on this page — the taxable column pays tax on each year's gain as it is realised, so it compounds on a smaller base every year and the gap widens rather than staying constant. The contribution cap is applied per year rather than once, because it rises in the year you turn 50 and is indexed to inflation most years. Holding the current limit flat across a long projection is therefore conservative.

  1. Start with your current Roth IRA balance.
  2. Grow it by your expected annual rate of return.
  3. Add this year's contribution, capped at the IRS limit for your age.
  4. Repeat for every year until your retirement age.
  5. Subtract everything you paid in to find the tax-free growth.

Worked example: Age 32 with $25,000, contributing the full $7,500 a year to 65 at 7%

Age 32 with $25,000, contributing the full $7,500 a year to 65 at 7%

In year one the $25,000 grows by 7% to $26,750, then the $7,500 contribution brings it to $34,250. The same cycle runs for 33 years, with the contribution limit rising to $8,600 from age 50 as the catch-up becomes available. By 65 the balance reaches roughly $1,114,000. Of that, about $288,000 is money you contributed — the original $25,000 plus 33 years of deposits — and the remaining $826,000 is growth you will never pay tax on. The same contributions in a taxable account at a 22% marginal rate end near $836,000, because each year's gain is taxed as it is realised and so compounds on a smaller base. The $278,000 difference is what the tax shelter is worth, and it is not a fixed discount — it widens every year the money stays invested.

What each roth ira input means

Current age
Your age today. The catch-up contribution becomes available in the year you turn 50.
Retirement age
When you plan to stop contributing. Roth withdrawals are tax-free from 59½ provided the account is at least five years old.
Current Roth IRA balance
What the account is worth today, across all your Roth IRAs.
Annual contribution
What you put in each year. The 2026 limit is $7,500, or $8,600 from age 50.
Expected annual return
Long-run average return on your holdings, net of fund fees.
Your marginal tax rate
Used only for the taxable-account comparison, to show what the Roth's tax shelter is worth. It does not affect the Roth balance itself.
Cap contributions at the 2026 IRS limit
Leave on unless you are modelling a scenario where the limit changes.

What this roth ira does not account for

  • Income limits are not applied. Roth contributions phase out above certain modified adjusted gross income thresholds, and above the top of the range you cannot contribute directly at all — a backdoor Roth conversion is the usual route.
  • Returns are assumed constant. A real sequence averaging 7% produces a different result, and a poor run near retirement matters far more than one early on.
  • The taxable comparison assumes gains are taxed annually at your marginal rate. A buy-and-hold investor would defer most of that tax and pay long-term capital gains rates instead, so the real gap is narrower than shown.
  • The contribution limit is held at this year's figure for all future years. It is indexed to inflation and rises most years, so a long projection is conservative.
  • Roth IRAs have no required minimum distributions during the owner's lifetime, unlike a traditional IRA or 401(k). Nothing here models drawdown either way.
  • Earnings are only tax-free from 59½ and after the account has been open five years. Your own contributions can always be withdrawn tax- and penalty-free.

Frequently asked questions

What is the Roth IRA contribution limit for 2026?

$7,500, up from $7,000 in 2025. From age 50 you can add a catch-up contribution of $1,100, giving a total of $8,600. The limit applies across all your IRAs combined, not per account.

Is a Roth IRA better than a traditional IRA?

It depends on tax rates now versus in retirement. A Roth is better if you expect to be in a higher bracket later, since you pay tax now at a lower rate. A traditional IRA deducts the contribution today instead.

Can I contribute to both a 401(k) and a Roth IRA?

Yes, the limits are separate and you can max both in the same year. Whether you can contribute to the Roth directly depends on your income, which phases out eligibility above a threshold.

When can I withdraw from a Roth IRA tax-free?

Earnings are tax-free from age 59½ provided the account has been open at least five years. Your own contributions can be withdrawn at any age without tax or penalty, because they were already taxed.

Does a Roth IRA have required minimum distributions?

No, not during the original owner's lifetime. That is a significant advantage over a traditional IRA or 401(k), both of which force withdrawals from age 73 whether you need the money or not.

What happens if I earn too much for a Roth IRA?

Direct contributions phase out above an income threshold. Above the range, the usual route is a backdoor Roth — contributing to a traditional IRA and converting it — which has its own tax consequences worth advice.

Sources and review

Last reviewed .