What Is the Roth IRA Growth Calculator?
This calculator applies to the United States Roth IRA, a retirement account funded with after-tax dollars. Because you already paid taxes on contributions, both the contributions and all investment earnings can later be withdrawn tax-free in retirement (subject to IRS rules such as being age 59½ and holding the account at least five years). This tool projects how a Roth IRA could grow over time. Annual contribution limits set by the IRS apply and change yearly — for 2024 the limit is $7,000 ($8,000 if age 50+); always confirm the current limit and your income eligibility.
How to Use It
Enter your current balance (PV), the annual contribution you plan to make (PMT), your expected annual return as a percentage, and the number of years until you stop contributing. The calculator compounds your balance and contributions annually and shows the future value, total amount contributed, and the tax-free investment earnings.
The Formula Explained
The future value combines two parts: the growth of your existing balance, \(PV \times (1+r)^{n}\), and the future value of an annuity of yearly contributions, \(PMT \times \frac{(1+r)^{n} - 1}{r}\). Here \(r\) is the decimal annual return and \(n\) is the number of years. Contributions are assumed to be made at the end of each year (ordinary annuity).
$$FV = PV\,(1+r)^{n} + PMT \cdot \frac{(1+r)^{n}-1}{r}$$
Worked Example
Suppose you start with $10,000, add $7,000 per year, expect a 7% return, and invest for 30 years. With \(r = 0.07\), \((1.07)^{30} \approx 7.612255\). The balance grows to about $76,123, and contributions grow to about $661,226, for a future value near $737,349. You contributed $220,000 and earned roughly $517,349 tax-free.
$$FV = 10000\,(1.07)^{30} + 7000 \cdot \frac{(1.07)^{30}-1}{0.07} \approx 737{,}349$$
FAQ
Are Roth IRA withdrawals really tax-free? Qualified withdrawals are federally tax-free, but you must meet IRS age and holding-period requirements.
What return should I use? A diversified stock portfolio has historically averaged about 6–8% annually before inflation, but returns are not guaranteed.
Does this account for inflation? No — results are in nominal future dollars. Reduce your return estimate to view results in today's purchasing power.
