Roth Ira Calculator

This Roth IRA Calculator helps you estimate the future value of your retirement savings by comparing a Roth IRA (tax-free growth) to a regular taxable investment account. It considers annual contributions, investment return rates, and tax impact to show you which strategy could be more beneficial in the long run.

Roth IRA Calculator 🧾

Current Balance ($): Annual Contribution ($): Expected Annual Return (%): Current Age: Retirement Age: Marginal Tax Rate (% for taxable account):

Total Tax (Taxable Account): $${taxableTax.toFixed(0)}

Difference (Roth vs Taxable): $${(rothBalance - taxableBalance).toFixed(0)}

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How to Use This Calculator

Enter your current balance – the amount you’ve already saved.
Enter your annual contribution – how much you plan to invest each year.
Set your expected annual return – your average yearly investment growth rate (e.g., 6%).
Enter your current age and target retirement age.
Input your marginal tax rate – this affects the taxable account growth only.
Click “Calculate” to view total balances and a yearly schedule until retirement.

Formulas Used:

For Roth IRA (no tax on growth):
Each year:

$\text{Roth}_{\text{new}} = \left( \text{Roth}_{\text{old}} \times (1 + r) \right) + A$

For Taxable Account (tax paid on gains yearly):

$\text{Taxable}_{\text{gain}} = (\text{Taxable}_{\text{old}} \times (1 + r)) – \text{Principal}$ $\text{Taxable}_{\text{new}} = (\text{Taxable}_{\text{old}} \times (1 + r)) – (\text{gain} \times \text{tax rate}) + A$

Where:

$A$ = Annual contribution
$r$ = Annual return rate (decimal)
$\text{Principal}$ is updated yearly by adding $A$

Example Calculation:

Current Balance: $20,000
Annual Contribution: $7,000
Expected Return: 6%
Current Age: 30
Retirement Age: 65
Tax Rate: 25%

Results by age 65:

Roth IRA Balance: $933,765
Taxable Account: $663,823
Difference: $269,942 in favor of Roth IRA
Total Principal: $265,000
Total Tax Paid on Taxable Account: $132,941