Roth IRA Calculator

This calculator shows how much your Roth IRA will grow over time and how much tax-free income it can generate in retirement.

• Annual Contribution: the most you can contribute to a Roth IRA in 2024 is $7,000. If you are 50 or older, the limit rises to $8,000. You can contribute less if your income limits your eligibility.
• Income limits: in 2024, Roth IRA contributions phase out for single filers with MAGI between $146,000 and $161,000, and for married filing jointly between $230,000 and $240,000. Above these limits, you cannot contribute directly (though a backdoor Roth IRA is available).
• Expected Annual Return: a diversified stock-heavy portfolio has historically returned 7-10% annually over long periods. Use 7% as a reasonable long-term estimate for a mix of stocks and bonds.
• Current Balance: if you already have a Roth IRA, enter that balance here to factor in compounding growth on existing savings.

The Roth IRA grows using compound interest on a monthly basis:

Balance = Previous Balance × (1 + r/12) + Monthly Contribution

Where r is the annual expected return. Contributions are made monthly (annual contribution / 12).

Tax advantage: unlike a traditional IRA or 401k, you contribute to a Roth IRA with after-tax dollars. All growth is tax-deferred, and qualified withdrawals in retirement (after age 59.5, account open at least 5 years) are completely tax-free.

Example: contributing $7,000/year from age 30 to 65 at 7% annual return yields $1,068,048 at retirement. Your total contributions are $245,000. The remaining $823,048 is tax-free investment gain.

Monthly income (4% rule): withdrawing 4% of the balance in year one of retirement. On $1,068,048, that is $42,722/year or $3,560/month, completely tax-free.