Roth IRA Calculator

What Makes a Roth IRA Different

A Roth IRA uses the opposite tax treatment from a Traditional IRA or 401(k). With those accounts, you contribute pre-tax money (often getting a deduction now) and pay ordinary income tax when you withdraw in retirement. A Roth IRA flips that: you contribute money that's already been taxed, get no upfront deduction, and in exchange every qualified withdrawal in retirement — your original contributions and every dollar of investment growth — comes out completely tax-free. This calculator uses the exact same compound-growth math as a Traditional IRA projection; the entire point of a separate Roth page is that tax outcome, not different arithmetic.

Why "Tax-Free Growth" Is the Whole Story Here

Look at the "Total Tax-Free Growth" figure in the results above — in a Traditional IRA, that identical dollar amount would eventually be taxed as ordinary income on withdrawal. In a Roth, it simply isn't, assuming the withdrawal is qualified (generally: the account has been open at least 5 years, and you're at least 59½). Over a multi-decade projection, growth is usually the largest single piece of the final balance, which is exactly why the Traditional-vs-Roth choice matters more the longer money stays invested — you're choosing which portion of a much larger future number gets taxed, not just which portion of today's contribution does.

The Compound Growth Formula

The math is identical to any compound-growth account: your starting balance grows on its own, and each contribution grows for whatever time remains once it's made.

$$A = P(1+r)^n + C \cdot \frac{(1+r)^n - 1}{r}$$

The calculator simulates this month by month rather than plugging directly into the formula, so the year-by-year table and chart show an exact running balance at every step.

Accounting for Fund Expense Ratios

The mutual funds, index funds, or ETFs held inside a Roth IRA typically charge their own annual expense ratio, deducted automatically from the fund's returns rather than billed separately. The optional Expense Ratio field subtracts that fee directly from your expected annual return before the projection runs, so the "Projected Tax-Free Balance" and "Effective Annual Rate" above reflect your real, after-fee growth rate rather than the fund's advertised headline return — and since Roth growth is never taxed on qualified withdrawal, the fee is the one drag on this account's return that isn't offset by any tax advantage. Leave it at 0 for a fee-free projection, or if you don't yet know the specific expense ratio of the funds you plan to hold.

Worked Example: 5,000 Dollars Start + 6,500 Dollars/Year at 7% for 30 Years

With the calculator's default inputs, the projected balance reaches roughly 701,400 dollars after 30 years — about 200,000 dollars from contributions and roughly 501,400 dollars from growth. In a Traditional IRA, that 501,400 dollars of growth would be taxed as ordinary income as it's withdrawn. In a Roth, assuming qualified withdrawals, none of it is — the entire 701,400-dollar balance is available tax-free.

Income Limits: The Catch With Roth IRAs

Unlike a Traditional IRA, Roth IRA eligibility isn't unconditional — contribution limits phase out and eventually disappear above certain income thresholds, which vary by filing status and are adjusted periodically. Higher earners may be ineligible to contribute directly at all (though other strategies, like a "backdoor" conversion, described below, exist for some situations). The reference table below shows the approximate 2026 MAGI (Modified Adjusted Gross Income) phase-out ranges — always check the current-year IRS income limits for your filing status before assuming you qualify to contribute directly.

Below the low end of your range, you can contribute the full amount; above the high end, you're ineligible to contribute directly at all; in between, your allowed contribution phases out proportionally. These figures adjust most years for inflation — verify the current-year figures with the IRS before relying on them.

How the Backdoor Roth Works

A "backdoor" Roth is a two-step workaround for savers whose income exceeds the direct-contribution limit above: first, contribute to a Traditional IRA (which has no income limit on the contribution itself, though the deduction may phase out), then convert that Traditional IRA balance to a Roth IRA shortly after. The conversion itself is generally taxable only on any investment growth or pre-tax balance that existed at the time of conversion — converting a brand-new, non-deductible contribution with little or no growth yet typically triggers little or no additional tax. This strategy has real complications worth knowing about before attempting it: the IRS's "pro-rata rule" treats all of your Traditional IRA balances (across every Traditional IRA you own) as one pool when calculating the taxable portion of a conversion, which can create an unexpected tax bill if you already hold other pre-tax IRA funds. This calculator doesn't model the backdoor Roth process itself — consult a tax professional before attempting one.

Common Roth IRA Mistakes

Assuming a Roth is automatically better than a Traditional account is a common oversimplification — the real comparison depends on whether your tax rate is likely to be higher now or in retirement, which nobody can know with certainty decades in advance. Withdrawing earnings early or before the account meets the 5-year/59½ qualified-withdrawal rule can trigger tax and penalties on the growth portion, even though a Roth's original contributions can usually be withdrawn penalty-free at any time. And contributing above the income limit without correcting it can trigger IRS excess-contribution penalties, so it's worth double-checking eligibility before contributing, not after.

Roth IRA Terms You Should Know

Qualified Withdrawal — a Roth withdrawal that meets the IRS's tax-free conditions: the account has been open at least 5 years, and the owner is at least 59½ (with some exceptions).

After-Tax Contribution — money contributed after income tax has already been paid on it, which is how every Roth contribution is funded.

Income Phase-Out — the income range over which your allowed Roth contribution shrinks toward zero, based on your filing status.

Backdoor Roth — a strategy some higher-income savers use (contributing to a Traditional IRA, then converting it to a Roth) to get money into a Roth despite exceeding the direct contribution income limit — see "How the Backdoor Roth Works" above for the mechanics and its pro-rata-rule complication.

Roth Conversion — moving money from a Traditional retirement account into a Roth, paying ordinary income tax on the converted amount now in exchange for tax-free growth afterward.

This calculator provides estimates for educational and planning purposes only. Actual amounts may vary based on real investment performance, fees, and contribution timing. It is not tax or financial advice — consult a qualified professional and verify current-year contribution and income limits with the IRS.