Roth IRA Savings Calculator

How it works

A Roth IRA is an ordinary investment account with one unusual rule. You fund it with money you have already paid income tax on, so no tax deduction comes on the way in. That missing deduction buys you something later: qualified withdrawals in retirement come out completely tax-free.

Nothing is taxed at the end, so the growth here is plain compound interest. The calculator grows the balance you hold today forward across the full timeline. Then it adds the future value of every monthly deposit, using end-of-month deposits and monthly compounding:

• B — your Roth balance at retirement
• P — the Roth balance you hold today
• M — what you contribute each month
• i — monthly return (annual rate ÷ 12)
• n — months until you retire

The projection uses only the four numbers you enter, plus a steady rate of return. It leaves out the annual IRA contribution limit, the income phase-out rules, and the rest of your tax situation.

Read the balance as a planning estimate, not a promise. At the defaults, the $15,000 already in the account grows to about $85,881 over 25 years at 7%. Adding $500 a month builds another $405,036, for a Roth balance near $490,917.

Split that total and $165,000 is money you put in: the $15,000 you started with plus $150,000 of contributions. The other $325,917 is growth. Nearly two thirds of the final number is money you never deposited, and the IRS never taxes it inside a Roth account.

✓ Every result is checked against independent reference math. See how we test the calculators →

How to use this calculator

1. Enter the balance your Roth IRA holds today, or zero if you have not opened one yet.
2. Add what you contribute each month, using an amount you can keep up.
3. Set the years until you retire, counting from your age now.
4. Choose a rate of return for the investments inside the account, such as 7%.
5. Read the projected balance, then check the split between what you contributed and what growth added.

A worked example: $500 a month into a Roth IRA for 25 years

Say you already have $15,000 in a Roth IRA and you set up a $500 automatic monthly transfer. Twenty-five years at a 7% return later, the account holds $490,917. You contributed $150,000 of that yourself.

The other $325,917 is growth, and because the tax was settled on the way in, every dollar of it is yours to spend.

The transfer is the lever you control. Raise it to $700 and the same 25 years at the same 7% finish at $652,931. You paid in $210,000 rather than $150,000, an extra $60,000 spread thinly across the whole stretch, and the ending balance climbed by $162,014.

Two hundred dollars a month bought back nearly three times itself, because each of those dollars still had decades left to compound.

Nothing clever is happening here. It is one automatic transfer, left alone, inside an account whose entire feature is that the IRS has already been paid. Enter your own balance, your own monthly amount, and the years you have left, and see what your version of the number looks like.

Why is the Roth IRA figure the one you can actually spend?

Nearly every retirement projection ends with a tax bill still to pay. A Roth IRA is the exception. Run the same $500 a month through traditional IRAs or a pre-tax 401(k) and the chart looks identical, because the compounding is identical.

The difference shows up on the day you withdraw. Money leaving a traditional IRA or a 401(k) counts as ordinary income, so the IRS taxes it. How much you keep depends on a tax bracket decades away, set by tax law nobody has written yet.

A Roth IRA removes that guess. You settled the income tax bill going in, at a rate you already knew. So $490,917 at the defaults means $490,917 of spending money, worth more to some savers than the tax deduction they gave up.

A third difference lands decades later. A traditional IRA and most 401(k)s force required minimum distributions in your seventies. A Roth account has no such rule while you live, and retirees who must take those distributions often send the money to charitable organizations instead.

The tax break passes on, too. Whoever you name as beneficiary, a spouse or charitable organizations, inherits the account with no income tax bill attached.

Can you take money out of a Roth IRA before retirement?

The money you contributed directly is yours to withdraw at any time, at any age, with no tax and no penalty. You already paid tax on those dollars, so the IRS has no further claim. At the defaults that is the $150,000 line in the breakdown.

Earnings work differently. Taking growth out tax-free requires two things: you must be at least 59½, and your Roth must have been open for five years. Miss either test and the earnings can be taxed and penalized.

That penalty pushes people toward a loan instead. An IRA allows no loans at all, unlike many 401(k)s, so a withdrawal is the only way to reach the money. Facing a large bill, people often borrow against the house rather than pay credit card rates.

Home equity loans and a home equity line of credit (HELOC) both leave your IRA compounding. Those loans track mortgage rates, and a HELOC can float upward, so the debt costs more when mortgage rates climb. Even so, borrowing often beats withdrawing, because a dollar pulled out in year ten gives up fifteen years of compounding.

How much of your savings should go into a Roth IRA?

There is no fixed share. The useful question in personal finance is not what percentage, but what order. A Roth IRA belongs high on that list, though not at the top.

A workable sequence for money you can spare each month:

• Emergency cash first. Three to six months of expenses at a bank or credit union covers car repairs without touching your investments.
• Then any employer match. A 401(k) match is an immediate return no investment assumption can beat.
• Expensive borrowing after that. Credit cards and personal loans usually charge more interest than your IRA is likely to earn.
• Your Roth IRA next, funded toward the annual IRA limit if the budget allows.

Anything past that limit goes back into the workplace plan or a taxable brokerage account. A retirement savings goal gives you the total to work back from. You can also solve for the monthly amount you need to save before typing it in here.

How long does it take to save $1 million in a Roth IRA?

This calculator answers that by trial. Leave the rate of return and your current balance where they are. Then raise the years until you retire, until the projected balance reads $1,000,000.

Two inputs move that date. Your monthly contribution sets how fast the balance climbs, and the timeline decides how long compound interest works on the investment. Starting early beats funding an IRA heavily later.

The same method answers a smaller question: how much will $10,000 in a Roth IRA be worth in 20 years? Enter 10,000 as the current balance, set the monthly contribution to zero, and set the timeline to 20 years. To see what $100 a month becomes, set the contribution to 100 instead.

At a 7% rate of return, the $10,000 result lands a little under four times the starting amount. None of that gain is owed to the IRS.

A million is a milestone, not a plan. What matters more is the retirement income the balance produces, and the number of years until you retire is the input you control most.

The IRA contribution and income limits this projection ignores

Two IRS rules sit outside this calculator, and both are left out because both change.

The first is the annual contribution limit, a cap on what you may put into an IRA each year. That cap covers your Roth IRA and any traditional IRAs together, not each account separately. Check the current figure on the IRS retirement plans pages before you build a plan around it.

The second is the income phase-out. Above a certain adjusted gross income your allowed contribution shrinks, and above a higher one it falls to zero. Adjusted gross income means gross income after certain adjustments, not the salary on your offer letter.

Those thresholds move each year and depend on how you file. Neither rule shuts you out completely, because the Roth option inside 401(k)s carries no income test. That is why higher earners often hold Roth money in a workplace plan instead.

Where you open your Roth IRA changes what you can hold

A Roth IRA is an account type, not an investment itself. The financial institution holding it decides what can go inside. A bank or credit union often holds one in certificates of deposit, which carry FDIC deposit insurance but grow slowly on fixed interest.

A brokerage version lets you buy stocks, mutual funds and exchange-traded funds (ETFs), the securities behind a 7% return. Brokerage accounts carry SIPC coverage instead, which protects you if the firm fails. No insurance covers a market that falls.

What you pay matters as much as what you can buy. An investment advisor charging a share of assets under management takes that share every year, while an index fund can cost almost nothing. Ask how an advisor is paid, since commission-based sales can create a conflict of interest.

That question is worth checking on paper too. You can look up any broker-dealer through BrokerCheck, the FINRA tool described on the SEC's Investor.gov.

The financial institution you pick also changes your tax bill on trading. Selling a winning fund in a taxable account triggers capital gains tax. Inside a Roth account, those capital gains are never taxed.

Money in this account is also left off the FAFSA. Retirement savings held here will not raise the figure the FAFSA reports. Savers with lower income may qualify for the saver's credit as well, a tax credit that cuts the bill dollar for dollar.