The Roth deal in one sentence
You pay income tax on the money before it goes in, and then you never pay tax on it again: not on the growth along the way, and not on qualified withdrawals in retirement. That second part is the whole game. Forty years of compounding can turn modest contributions into a sum where most of the balance is growth, and in a Roth IRA every dollar of that growth is yours. This calculator shows you the projection, and then does the thing we think matters most: it puts the same dollars in a plain taxable account next to it, so you can see what the tax-free wrapper is actually worth in dollars.
How the projection works
We compound your balance once a year at your expected return and add your annual contribution at the end of each year. That is a deliberate, stated convention: real life is messier (most people contribute monthly, and returns arrive in lumps), but year-end annual contributions keep the math transparent and slightly conservative, since your money gets credited a little later than it would with monthly deposits.
The taxable-account comparison uses a simplifying assumption we want you to see plainly: it grows the same contributions at your return minus tax, as if all growth were taxed every year at your current marginal rate. Real taxable investing is often gentler than that (long-term capital gains rates are lower, and tax is deferred until you sell), so treat the gap as the upper end of the Roth advantage. The honest range sits between roughly half the gap shown and the full gap, depending on how tax-efficiently you would have invested the taxable money.
One more dose of honesty: the expected return is your guess, not a promise. A 7% average over 35 years includes years down 20% and years up 30%. The projection is a planning tool, not a forecast.
The formula
B is your current balance, C the annual contribution added at the end of each year, r the expected annual return as a decimal, and n the number of years until retirement. The taxable comparison uses the same formula with r replaced by r × (1 − t), where t is your marginal tax rate.
2026 contribution limits
For the 2026 tax year per IRS, you can contribute up to $7,500 to your IRAs combined, or $8,600 if you are age 50 or older (the catch-up rose to $1,100). Your ability to contribute directly to a Roth phases out between $153,000 and $168,000 of modified adjusted gross income for single filers, and between $242,000 and $252,000 for married couples filing jointly. These figures adjust most years, so check the vintage if you are reading this later.
If you enter a contribution above the limit, we will flag it but still run the numbers. Households with two spouses each funding an IRA, or savers using a backdoor Roth conversion, can legitimately put away more than one person's limit, and this page is not in the business of pretending to know your situation.
The 5-year rule and qualified withdrawals
Tax-free treatment of earnings has two conditions: you are generally 59 and a half or older, and at least 5 years have passed since January 1 of the tax year of your first Roth IRA contribution. Miss either and withdrawn earnings can owe income tax and possibly a 10% penalty. Your own contributions are a different story: you can take them back out at any age, any time, with no tax and no penalty, because that money was taxed on the way in. That flexibility is a genuinely underrated feature of the Roth. (Source: IRS Publication 590-B covers the details and the exceptions.)
Roth vs traditional: the other question
This page assumes you have decided on Roth and shows what it grows to. The prior question, whether to pay tax now (Roth) or later (traditional), turns on comparing your tax rate today with your expected rate in retirement. Our Roth conversion calculator is built for exactly that comparison.
Worked example
A 30-year-old with a $0 balance contributes $7,000 at the end of every year until 65 and earns 7% a year. That is 35 years of compounding.
FV = 7,000 × ((1.07)35 − 1) / 0.07 = $967,658.15
Total contributed: 35 × $7,000 = $245,000.00. Growth: $722,658.15. Nearly three quarters of the final balance is growth, and in a Roth all of it comes out tax-free.
The same $7,000 a year in a taxable account, with growth taxed annually at a 22% marginal rate (an effective 5.46% return), ends at $695,889.80. The Roth advantage under that assumption: $271,768.35.
The mistake that costs the most
Waiting. The single biggest input in this projection is n, the number of years, because it sits in the exponent. In the example above, starting at 35 instead of 30 with identical contributions ends around $660,000 instead of $967,000: five skipped years and $35,000 of skipped deposits cost over $300,000 at the finish line. If you cannot fund the full limit, fund something. A partial contribution that starts today beats a full one that starts someday. When you are ready to plan the other end, our retirement withdrawal calculator shows how long the balance lasts, our compound interest calculator handles non-retirement savings, and our S&P 500 investment calculator shows what historical market returns actually looked like year by year.