Roth IRA Calculator

Roth IRA contributions are made with money you've already paid tax on, but in exchange, all future growth and qualified withdrawals in retirement are completely tax-free. A regular taxable investment or savings account, by contrast, typically owes tax on investment gains along the way, which quietly reduces the amount left to keep compounding.

This calculator projects your Roth IRA balance month by month, and runs a side-by-side simulation of an equivalent taxable account making identical contributions and earning the identical return, but paying tax annually on its gains at the rate you enter. The difference between the two, the 'tax-free advantage', shows concretely what that tax-free treatment is worth in dollar terms by the time you retire.

This calculator doesn't enforce the IRS annual Roth IRA contribution limit, which changes periodically and depends on your income and filing status, so make sure your entered annual contribution reflects your actual allowed limit. It also assumes the taxable comparison account is taxed annually on gains realized that year, a simplification of how many taxable accounts (like a brokerage account you don't actively sell in) actually work in practice.

Starting at age 30 with a $10,000 balance, contributing $6,500 a year until retirement at 65 (35 years), at an expected 7% annual return, with a 15% comparison tax rate: the Roth IRA balance grows to $1,090,632.76 tax-free, on $227,500 of total contributions, for $853,132.76 of total growth. The equivalent taxable account, earning the same return but taxed annually on its gains at 15%, ends up at $848,415.44, a tax-free advantage of $242,217.32, the concrete dollar value of never paying tax on Roth growth.

Note: growth here compounds monthly (not annually), so a 7% annual return behaves like a 7.23% effective annual rate, which is why the balance comes out higher than a simple annual-compounding hand calculation would suggest.