Roth IRA Calculator
Project the tax-free value of a Roth IRA at retirement and see exactly how much the tax shelter is worth compared with an ordinary taxable account.
Comment utiliser cette calculatrice
- 1Enter your current age and your planned retirement age.
- 2Add your existing Roth IRA balance and the amount you contribute each year.
- 3Set an expected annual return for your investments.
- 4Enter the tax rate you would pay on investment gains outside a retirement account.
- 5Compare the tax-free balance with the taxable-account line to see the value of the shelter.
Comment ça marche
Roth IRA growth formula
Bₙ = Bₙ₋₁ × (1 + r) + C × (1 + r/2) Taxable comparison uses r_net = r × (1 − t) B = balance, C = annual contribution r = expected return, t = tax rate on gains
A Roth IRA compounds at the full return because growth is never taxed. A taxable account loses part of each year's gain to tax, so it compounds at a lower effective rate. The gap between the two lines is the value of the tax shelter, and it widens every single year.
Exemple détaillé
A 30-year-old with $10,000 saved who contributes $7,000 a year at a 7% return reaches about $1.13 million tax free by age 65. The same contributions in a taxable account taxed at 15% on gains reach roughly $930,000 — the Roth shelter is worth about $200,000.
Roth IRA Calculator : le guide complet
Why a Roth IRA is worth more than the same money invested elsewhere
Roth contributions are made with money you have already paid income tax on. In exchange, every dollar of growth and every qualified withdrawal after age 59½ is completely free of tax. Nothing is owed when the account is sold, rebalanced, or drawn down.
In a normal brokerage account, dividends and realised gains are taxed as they occur, so each year a slice of the return is removed before it can compound. That missing slice compounds too — which is why the gap between the two lines in the chart above grows faster than the tax rate alone would suggest.
Roth or traditional?
The decision turns on one comparison: your tax rate now versus your expected tax rate in retirement. If you expect to be in a higher bracket later, paying tax today at a lower rate and withdrawing tax free is the better deal — the classic case for a Roth. If you are at your peak earning years and expect a lower retirement bracket, a traditional account's up-front deduction usually wins.
Two features tilt the balance toward Roth regardless of brackets. Roth IRAs have no required minimum distributions during the original owner's lifetime, so the money can keep compounding untouched. And direct contributions (not earnings) can be withdrawn at any time without tax or penalty, which makes the account far more flexible than its reputation suggests.
Limits worth checking before you contribute
The IRS sets an annual contribution limit across all your IRAs combined, with an extra catch-up amount from age 50. It also phases out direct Roth eligibility above certain income levels, which is why higher earners often use a backdoor Roth conversion instead. Both figures change most years, so confirm the current numbers before setting up automatic contributions.
This calculator deliberately does not enforce those limits so you can model scenarios — including catch-up contributions or a lump-sum conversion — without fighting the form.
Questions fréquentes
When can I withdraw from a Roth IRA tax free?
Qualified withdrawals require you to be at least 59½ and to have held a Roth IRA for at least five years. Your own direct contributions can be withdrawn at any age without tax or penalty, because that money was already taxed — only the earnings are subject to the rules.
Does a Roth IRA have required minimum distributions?
No. Unlike a traditional IRA or 401(k), a Roth IRA has no required minimum distributions for the original owner, so the balance can keep growing tax free for as long as you like. Inherited Roth IRAs do have distribution rules.
What return should I assume?
Most planners use 6–8% nominal for a stock-heavy portfolio and 4–5% for a balanced one. Because the projection is nominal, subtract your inflation assumption from the return if you want to read the result in today's purchasing power.
How is the taxable comparison calculated?
It applies the tax rate you enter to each year's investment gain, so the account compounds at return × (1 − tax rate). This models a fund that distributes and realises its gains annually. A buy-and-hold portfolio that defers gains until sale would land somewhere between the two lines.
Can I contribute to both a Roth IRA and a 401(k)?
Yes. The IRA limit and the 401(k) deferral limit are separate, so you can contribute the maximum to both in the same year. A common order of priority is: contribute enough to a 401(k) to earn the full employer match, then fill the Roth IRA, then return to the 401(k).