See what your contributions grow into — and how much of that growth is yours completely tax-free.
Tax-free balance at retirement
$1,223,207
Every dollar is tax-free to withdraw.
Sustainable tax-free withdrawal.
2025 limit: $7,000.
Contributing $7,000 a year on top of your $15,000 balance, you'd put in $260,000 over 35 years and earn $963,207 in growth. In a Roth IRA, every dollar of that growth — and all future withdrawals in retirement — is completely tax-free.
The same $963,207 of growth in a regular taxable brokerage account would eventually owe roughly $144,481 in long-term capital gains tax — and more if tax rates rise. In the Roth, it's zero. This is why a Roth is especially powerful when you're young: decades of compounding all escape tax entirely.
See capital gains taxA Roth is usually better if you expect a higher tax rate in retirement than today — you pay tax now at a known rate and never again. A traditional IRA or 401(k) wins if you expect a lower rate later. Many people use both. Check how your 401(k) fits alongside this.
401(k) calculatorWorked scenarios with the full analysis, so you can see how the numbers move before entering your own.
A saver contributing the full annual limit from a modest starting balance — the core Roth scenario.
Tax-free balance at retirement
$1,223,207
Contributing $7,000 a year on top of your $15,000 balance, you'd put in $260,000 over 35 years and earn $963,207 in growth. In a Roth IRA, every dollar of that growth — and all future withdrawals in retirement — is completely tax-free.
The same $963,207 of growth in a regular taxable brokerage account would eventually owe roughly $144,481 in long-term capital gains tax — and more if tax rates rise. In the Roth, it's zero. This is why a Roth is especially powerful when you're young: decades of compounding all escape tax entirely.
See capital gains taxA Roth is usually better if you expect a higher tax rate in retirement than today — you pay tax now at a known rate and never again. A traditional IRA or 401(k) wins if you expect a lower rate later. Many people use both. Check how your 401(k) fits alongside this.
401(k) calculatorA young saver just beginning, showing how an early start turns modest contributions into a large tax-free balance.
Tax-free balance at retirement
$1,531,141
Contributing $7,000 a year on top of your $0 balance, you'd put in $280,000 over 40 years and earn $1,251,141 in growth. In a Roth IRA, every dollar of that growth — and all future withdrawals in retirement — is completely tax-free.
The same $1,251,141 of growth in a regular taxable brokerage account would eventually owe roughly $187,671 in long-term capital gains tax — and more if tax rates rise. In the Roth, it's zero. This is why a Roth is especially powerful when you're young: decades of compounding all escape tax entirely.
See capital gains taxA Roth is usually better if you expect a higher tax rate in retirement than today — you pay tax now at a known rate and never again. A traditional IRA or 401(k) wins if you expect a lower rate later. Many people use both. Check how your 401(k) fits alongside this.
401(k) calculatorA later starter using the 50+ catch-up limit to build tax-free savings over 20 years.
Tax-free balance at retirement
$546,198
Contributing $7,000 a year on top of your $60,000 balance, you'd put in $200,000 over 20 years and earn $346,198 in growth. In a Roth IRA, every dollar of that growth — and all future withdrawals in retirement — is completely tax-free.
IRAs cap contributions at $7,000 a year ($8,000 at 50+), across all your traditional and Roth IRAs combined. The projection uses $7,000. Over-contributing triggers a 6% annual penalty until corrected, so keep total IRA contributions under the limit.
The same $346,198 of growth in a regular taxable brokerage account would eventually owe roughly $51,930 in long-term capital gains tax — and more if tax rates rise. In the Roth, it's zero. This is why a Roth is especially powerful when you're young: decades of compounding all escape tax entirely.
See capital gains taxThe same start as the first example but a more conservative return assumption.
Tax-free balance at retirement
$748,726
Contributing $7,000 a year on top of your $15,000 balance, you'd put in $260,000 over 35 years and earn $488,726 in growth. In a Roth IRA, every dollar of that growth — and all future withdrawals in retirement — is completely tax-free.
The same $488,726 of growth in a regular taxable brokerage account would eventually owe roughly $73,309 in long-term capital gains tax — and more if tax rates rise. In the Roth, it's zero. This is why a Roth is especially powerful when you're young: decades of compounding all escape tax entirely.
See capital gains taxA Roth is usually better if you expect a higher tax rate in retirement than today — you pay tax now at a known rate and never again. A traditional IRA or 401(k) wins if you expect a lower rate later. Many people use both. Check how your 401(k) fits alongside this.
401(k) calculatorA Roth IRA is funded with money you've already paid income tax on. In exchange, the account grows tax-free and every qualified withdrawal in retirement — contributions and all the growth — comes out completely tax-free. That's the opposite of a traditional IRA or 401(k), which gives you a tax break now but taxes withdrawals later.
The tax-free growth is the whole point. Because you never owe tax on the gains, decades of compounding work entirely in your favor, which is why starting a Roth early is so powerful. You can also withdraw your contributions (not the growth) at any time without tax or penalty, which makes it unusually flexible for a retirement account.
The choice hinges on one comparison: your tax rate now versus in retirement. A Roth is better if you expect to be in the same or a higher bracket later, because you lock in today's rate and never pay again. A traditional account is better if you expect a lower rate in retirement, since you defer the tax to when it's cheaper.
For younger workers early in their careers — likely to earn and be taxed more later — the Roth is often the clear winner. Many people also value the certainty: a Roth balance is truly yours, with no future tax bill hanging over it, whereas a traditional balance is partly the government's. Splitting contributions between both is a reasonable hedge against not knowing future tax rates.
Roth IRAs have income limits: above certain thresholds, your ability to contribute directly phases out. This calculator projects growth and doesn't check eligibility, so confirm you're under the limit for your filing status before contributing directly.
Higher earners who are phased out often use a 'backdoor Roth': contributing to a traditional IRA and then converting it to a Roth, which has no income limit. It's a legitimate, widely used strategy, but the pro-rata rule can create a tax bill if you hold other pre-tax IRA money, so it's worth understanding the mechanics — or getting advice — before doing it.
The Roth's tax-free compounding rewards time more than anything. A missed year in your 20s can't be made up later, and it costs far more in final balance than it seems.
Putting in more than the annual limit across all IRAs triggers a 6% penalty each year until fixed. Track total contributions if you have more than one account.
Direct Roth contributions phase out at higher incomes. Contributing when ineligible creates an excess-contribution problem — check your limit or use a backdoor Roth.
Money contributed to a Roth isn't automatically invested. Uninvested cash earns almost nothing and wastes the account's tax-free growth — choose investments after contributing.
Contributions come out freely, but pulling earnings before 59½ usually means taxes plus a 10% penalty, undoing the tax-free advantage.
It depends on your contributions, current balance, years invested and return. Enter them above for a projection. As an example, maxing $7,000 a year from age 30 to 65 at a 7% return grows to roughly $1 million — all of it tax-free to withdraw in retirement.
For 2025, you can contribute up to $7,000 across all your IRAs, or $8,000 if you're 50 or older. This limit is shared between traditional and Roth IRAs combined, and Roth eligibility also phases out at higher incomes.
It depends on your tax rate now versus in retirement. A Roth (pay tax now, withdraw tax-free) wins if you expect a higher or equal rate later — common for younger savers. A traditional IRA (deduct now, pay tax later) wins if you expect a lower rate in retirement. Many people contribute to both.
You can withdraw your contributions (the money you put in) at any time, tax- and penalty-free, because you already paid tax on it. Withdrawing earnings before age 59½ and before the account is five years old generally triggers taxes and a 10% penalty, with some exceptions like a first home purchase.
No. Unlike traditional IRAs and 401(k)s, a Roth IRA has no required minimum distributions during the original owner's lifetime. You can let it grow untouched as long as you like, which makes it a powerful tool for both retirement flexibility and passing wealth to heirs tax-free.
It depends on your investments, but a diversified stock-heavy portfolio has historically returned about 7% a year after inflation over the long run. Planning at 6–7% is prudent. Because Roth growth is tax-free, the after-tax return is simply the return itself — a meaningful edge over a taxable account.
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