Roth IRA Growth and Tax Comparison Calculator

A Roth IRA is an individual retirement arrangement generally funded with after-tax money. Eligible contributions do not create a current federal income-tax deduction, but qualified withdrawals can be free of federal income tax. The Roth IRA calculator projects an existing balance and equal annual contributions at a constant annual return. Contributions are treated as deposits at the end of each year, a conservative timing assumption compared with monthly or beginning-of-year funding. Future value combines two parts. The initial balance compounds for the full number of years. Annual contributions use the future value of an ordinary annuity: contribution multiplied by the growth factor minus one, divided by the return rate. When return is zero, the formula simply adds each contribution. Total principal is the initial balance plus annual contributions, and investment growth is projected balance minus that principal. The tax comparison is intentionally limited. It applies the entered retirement tax rate to the same projected account value to illustrate what would remain if that entire balance were taxable at withdrawal. A real traditional IRA comparison is more complex because deductible contributions may create current tax savings that can also be invested, withdrawals can span tax brackets, and basis may exist. The estimated current-tax cost multiplies one annual Roth contribution by the current rate; it is not a tax bill calculation. Roth IRA contribution eligibility and limits depend on tax year, age, modified adjusted gross income, filing status, compensation, and contributions to other IRAs. Limits change over time and catch-up rules may apply. The entered annual contribution is not validated against a specific year's legal maximum. Early distribution ordering, the five-year rules, conversions, penalties, state taxes, and inherited-account rules are also outside this projection. Original Roth IRA owners generally do not take lifetime required minimum distributions. A constant return hides volatility and sequence risk. Fees, fund expenses, contribution timing, missed contributions, and asset allocation can materially change outcomes. Test several returns and horizons instead of treating one number as a forecast. Roth decisions often depend on whether today's marginal tax rate is lower or higher than future rates, but flexibility, estate goals, required distributions, and tax diversification also matter. Use current IRS guidance and qualified tax advice for eligibility or conversion decisions. The Roth IRA calculator demonstrates compounding and a simplified tax contrast; it does not recommend an account type or investment.