How the projection works
The calculator starts with your current Roth IRA balance and grows it at your expected annual return. It then adds a fixed contribution each year and lets the whole account — existing balance plus every new contribution — keep compounding for the years that remain.
The power of a Roth comes from compounding on money that will never be taxed again. Returns earned early go on to earn their own returns, and because qualified withdrawals are tax-free, every dollar of that growth is yours to keep. Contributions made sooner have far longer to compound than the same dollars added near the end.
Reading your results
The tax-free ending balance is the projected value at the end of the period, all of which you can withdraw tax-free in retirement if the withdrawal is qualified. Total contributions is what you put in — your starting balance plus each yearly contribution — and total growth is everything earned on top.
The donut chart shows how much of the balance came from your own contributions versus tax-free growth, and over long horizons growth usually dominates. The balance chart traces the account climbing year by year.
Practical tips
A few ways to get the most from a Roth IRA:
- Contribute up to the annual IRS limit when you can; the room generally does not carry forward to later years.
- Fund the account early in the year so contributions have more time to compound tax-free.
- Because the growth is never taxed, a Roth is especially valuable if you expect to be in a higher tax bracket in retirement.
- Check that your income is within the IRS limits for direct Roth contributions.
Caveats and common mistakes
This model assumes a constant return every year and contributions added at year-end. Real markets are volatile, and the sequence of returns matters. It also ignores fees and inflation, so the future balance will buy less than the same figure does today. Roth eligibility phases out at higher incomes, and withdrawing earnings before age 59½ or before the account is five years old can be taxed and penalized.
This is an educational estimate, not financial or tax advice. Confirm contribution and income limits and your own strategy with a qualified professional.
Formula
r = annualReturn/100; n = years; fv = B·(1+r)ⁿ + C·(((1+r)ⁿ − 1)/r)Frequently asked questions
- Why are Roth withdrawals tax-free?
- You contribute after-tax dollars, so the IRS does not tax qualified withdrawals later — including the investment growth. This is the main difference from a traditional IRA.