How it works
A Roth IRA flips the usual retirement-account tax timeline: you fund it with dollars that have already been taxed, and in exchange the IRS lets every bit of growth — dividends, capital gains, compounded earnings — come out tax-free once you reach age 59½ and the account has been open at least five years. This calculator focuses purely on projecting that future balance from three figures: your yearly contribution, an assumed annual return percentage, and the number of years you plan to keep contributing.
The tool does not factor in Roth-specific eligibility rules like the income phase-out, nor does it adjust for inflation or contribution-limit changes over time. It gives you a clean, pre-inflation nominal projection so you can compare scenarios side by side.
The formula
Balance = Contribution × [((1 + r)^n − 1) / r]
Here r is the annual return expressed as a decimal (6% → 0.06) and n is the number of years.
Worked example
Consider a 35-year-old who opens a Roth IRA and contributes $6,500 every year, aiming to retire at 65 — a 30-year horizon. Assume a 6% average annual return.
r = 0.06, n = 30
Growth factor = ((1.06)^30 − 1) / 0.06
(1.06)^30 ≈ 5.7435
Growth factor = (5.7435 − 1) / 0.06 ≈ 79.058
Ending balance = $6,500 × 79.058 ≈ $513,877
Total you put in = $6,500 × 30 = $195,000
Tax-free growth = $513,877 − $195,000 = $318,877
Because this is a Roth, that $318,877 of earnings is never taxed — no capital-gains bill, no ordinary-income treatment at withdrawal. With a Traditional IRA funded at the same $6,500 level, you would eventually owe income tax on the entire $513,877 at distribution time.
One Roth-specific constraint: high earners face a phase-out that can reduce or eliminate direct contribution eligibility. For 2024, single filers with modified AGI between $146,000 and $161,000 see their allowed contribution shrink proportionally, and above $161,000 they cannot contribute directly at all. Married couples filing jointly hit the phase-out between $230,000 and $240,000. Traditional IRAs have no equivalent income ceiling for contributing — only for deducting.
Things to watch
| Factor | Roth IRA impact |
|---|---|
| Income phase-out | Blocks high earners from direct contributions |
| 5-year aging clock | Must be open 5 years before tax-free earnings withdrawals |
| Contribution cap | $7,000 for 2024 ($8,000 if 50+) — not modeled here |
| Inflation | Returns you enter are nominal; real purchasing power will be lower |
This projection is an estimate, not professional tax or investment advice. Actual returns fluctuate, contribution limits adjust annually, and your eligibility can shift with income changes.