Roth IRA Calculator
Project Roth IRA growth at retirement with annual contributions, tax-free compounding, and catch-up contribution modeling.
Reviewed by Sahil, Senior Finance & Tax Editor · Editorial policy
Roth IRA Calculator Formula
Roth Balance = PV(1+r)^n + PMT x [((1+r)^n - 1) / r] (all withdrawals tax-free)
Roth IRA contributions are made with after-tax dollars. The balance grows tax-free through compound interest, and all qualified withdrawals in retirement are tax-free — unlike Traditional IRAs where withdrawals are taxed as ordinary income.
Roth IRA Calculator — Worked Examples
Example 1: 30-Year-Old Maxing Roth IRA
Problem:Age 30, retire at 65. $15,000 current balance. $7,000/year (max). 7% return. Current tax rate 22%, retirement rate 15%.
Solution:After 35 years at 7%:\nTotal contributions: $15,000 + $245,000 = $260,000\nRoth balance: ~$1,100,000 (all tax-free)\nTraditional equivalent after tax: ~$935,000\nRoth advantage: ~$165,000 in tax savings
Result:Roth balance: ~$1.1M tax-free | Traditional after-tax: ~$935k
Roth IRA Calculator — Frequently Asked Questions
Roth IRA vs Traditional IRA — which is better?
Choose Roth if you expect your tax rate to be higher in retirement (younger people, expect income growth, expect tax rates to rise). Choose Traditional if your current tax rate is high and you expect lower rates in retirement. Roth wins if: you're in a low bracket now, have decades until retirement (more tax-free growth), or want flexibility (no RMDs, contributions can be withdrawn anytime). Traditional wins if: you're in a high bracket now and need the immediate tax deduction.
Can I withdraw Roth IRA contributions early?
Yes! Roth IRA contributions (not earnings) can be withdrawn at any time, at any age, tax-free and penalty-free. This makes Roth IRAs more flexible than traditional IRAs or 401(k)s. Earnings can be withdrawn tax/penalty-free after age 59.5 AND 5 years since first contribution. Before that, earnings withdrawals face income tax plus a 10% penalty (with some exceptions like first home purchase up to $10,000, disability, etc.).
What is the difference between a traditional and Roth retirement account?
Traditional 401(k)/IRA contributions reduce taxable income today but withdrawals in retirement are taxed as ordinary income. Roth accounts use after-tax contributions with no upfront deduction, but qualified withdrawals (age 59½+, 5-year holding) are completely tax-free including all growth. Choose Roth if you expect higher taxes in retirement; choose traditional if you expect lower rates. Roth IRAs have no required minimum distributions, unlike traditional accounts. Holding both provides tax flexibility at withdrawal.