How to Use This Calculator
1
Enter Your Details
Input your current Roth IRA balance, age, income, filing status, and monthly contribution.
2
Set Growth Parameters
Choose expected return rate, inflation, and volatility assumptions.
3
Review Tax-Free Growth
See projected balance, Monte Carlo confidence bands, and contribution phase-out status.
Key Terms
- Roth IRA
- A retirement account funded with after-tax dollars. Qualified withdrawals of both contributions and earnings are completely tax-free.
- MAGI
- Modified Adjusted Gross Income — your AGI with certain deductions added back. Used to determine Roth IRA eligibility.
- Five-Year Rule
- Roth IRA earnings are tax-free only if the account has been open at least 5 years and you are 59.5 or older.
- Backdoor Roth
- A strategy for high earners: contribute to a non-deductible Traditional IRA, then convert to Roth. Avoids income limits.
- Roth Conversion
- Moving money from a Traditional IRA or 401(k) to a Roth IRA. You pay taxes now but get tax-free growth and withdrawals later.
Real-World Examples
Example 1
Young Professional
Age: 28, Balance: $15,000, Monthly: $583 (max), Return: 8%, Retire: 65
Result: Projected tax-free balance at 65: ~$1,350,000. All withdrawals in retirement are completely tax-free.
Example 2
Mid-Career Saver
Age: 42, Balance: $100,000, Monthly: $583, Return: 7%, Retire: 65
Result: Projected balance: ~$780,000 tax-free. The existing balance benefits from 23 more years of compounding.
The Roth IRA Advantage
Tax-Free Growth Changes Everything
A Roth IRA growing at 8% for 30 years turns $7,000 annual contributions into over $800,000 — all tax-free. The equivalent Traditional IRA balance would face 22-37% tax on every withdrawal, making the Roth worth significantly more in real spending power.
No RMDs: The Hidden Benefit
Unlike Traditional IRAs, Roth IRAs have no Required Minimum Distributions. This means your money can continue growing tax-free for as long as you want, making Roth IRAs excellent wealth transfer vehicles for heirs.
When to Prioritize Roth
Contributing to Roth accounts makes the most sense when you are in a lower tax bracket now than you expect to be in retirement. Early career, low-income years, and years with large deductions are prime Roth contribution opportunities.