ClearCalc

How it works

A Roth IRA grows in two ways at once: the money already in the account earns returns, and each new monthly contribution starts earning returns of its own. This calculator models both streams with monthly compounding, which is how investment growth actually accumulates.

The formula has two parts. First, your current balance grows on its own: future value of balance = balance × (1 + r)ⁿ. Second, your monthly contributions form a growing stream: future value of contributions = monthly amount × [((1 + r)ⁿ − 1) ÷ r]. In both parts, r is your annual return divided by 12 (the monthly rate), and n is the number of months — years × 12. Add the two parts together and you get the projected balance. The calculator also shows how much of that total you actually put in, so you can see how much of the final number is your money and how much is growth doing the heavy lifting.

Here is the worked example using the default inputs above. Starting with a $1,000 balance, contributing $200 a month, earning 7% a year for 30 years, the projected balance is $252,110.70. Of that, you contributed $73,000.00 ($1,000 up front plus $200 × 360 months) — meaning $179,110.70, more than twice what you put in, came from growth alone. That gap is the whole point of starting early: time in the market matters more than the size of any single contribution.

Two honest caveats. The calculator assumes a perfectly steady return every month, while real markets bounce up and down, and it ignores investment fees. Treat the result as a planning estimate that shows the power of consistent contributions, not as a promise of a future balance.

Frequently asked questions

What is a Roth IRA?
A Roth IRA is an individual retirement account you open at a brokerage or bank and fund with money that has already been taxed. The money is invested, grows inside the account, and — unlike a regular brokerage account — you owe no tax on the growth as long as the withdrawal rules are met in retirement.

How much can I contribute to a Roth IRA each year?
The IRS sets an annual limit that is adjusted from time to time, and contributions also can't exceed your earned income for the year. For 2025, the limit was $7,000 if you were under 50, with an extra catch-up amount for savers 50 and older. Always check the current IRS limits before contributing, since income phase-outs can reduce how much higher earners may put in.

What is the difference between a Roth IRA and a traditional IRA?
Roth IRA: you pay tax on the money now and withdraw it tax-free in retirement. Traditional IRA: you may get a tax deduction now and pay tax on the money when you withdraw it in retirement.

What annual return should I assume?
A common planning assumption is around 7% a year, which is roughly the long-run average return of the U.S. stock market after adjusting for inflation (about 10% before inflation). More cautious savers use 5–6%. Whatever you pick is an assumption for planning, not a guarantee — actual returns vary year by year.

Are withdrawals from a Roth IRA taxed in retirement?
Qualified withdrawals — generally those made after age 59½ and after the account has been open at least five years — are completely tax-free, including all the earnings. Your own contributions (not the earnings) can be withdrawn at any age without tax or penalty, because you already paid tax on that money going in.