Published methodology
How the Roth projection is calculated.
Roth Growth is an educational compound-growth model. It estimates what a starting balance and recurring contributions could become under a constant return assumption. This page publishes the formulas, timing choices, current-law references, and important limitations.
1. Inputs used by the model
The projection uses six visitor-controlled assumptions:
- Current age and target retirement age
- Current Roth IRA balance
- Recurring contribution and its frequency
- Expected annual investment return
- Expected annual inflation
The difference between the two ages determines the projection period. The calculator does not verify birth dates, earned income, modified adjusted gross income, filing status, or whether an entered balance and contribution belong to the same tax year.
2. Annualizing contributions
The selected contribution is converted to an annual amount using a fixed frequency multiplier:
weekly amount × 52 = annual contributionmonthly amount × 12 = annual contributionyearly amount × 1 = annual contributionThe annualized amount is then divided by twelve and deposited at the end of each modeled month. A real weekly plan would make 52 separate deposits, so this monthly simplification can produce a slightly different result from an account statement.
3. Converting the return to a monthly rate
The annual return is converted into an equivalent monthly rate before the projection loop begins:
monthly rate = (1 + annual return)1/12 − 1Each month, the existing balance is multiplied by one plus the monthly rate, then the monthly contribution is added. This order models contributions at the end of each month. The calculation repeats until the target age is reached.
A constant rate is a mathematical convenience—not a forecast. Real investments can gain or lose value, and two portfolios with the same long-term average return can produce different outcomes when gains, losses, and withdrawals occur in a different order.
4. Contributions and estimated growth
Total contributions equal the starting balance plus all modeled deposits. Estimated investment growth is the projected ending balance minus that contribution total:
growth = projected balance − total contributionsThe displayed growth is not realized profit, guaranteed earnings, or a tax calculation. It does not deduct fund expenses, advisory fees, transaction costs, penalties, or taxes that could apply to a nonqualified transaction.
5. Inflation-adjusted purchasing power
The calculator translates the projected balance into an estimate expressed in today's purchasing power:
today's dollars = future balance ÷ (1 + inflation)yearsThis is not a second account balance. It is a comparison that helps show how inflation can reduce what a future amount buys. Future inflation will not be constant and may differ materially from the rate entered.
6. Five-year waiting comparison
The “cost of waiting” result runs the same return, retirement age, starting balance, and recurring contribution through a second scenario. The existing starting balance remains invested, but new contributions do not begin until month 61. The delayed ending balance is subtracted from the original ending balance.
This result illustrates the value of additional time under the selected return assumption. It should not be interpreted as a guaranteed loss from waiting; actual markets can decline, and a person's financial priorities can justify delaying retirement contributions.
7. 2026 contribution-limit reference
The calculator compares the annualized contribution with the general 2026 IRA limit of $7,500, or $8,600 for someone age 50 or older. The age comparison uses the current age entered and cannot determine whether someone turns 50 by the end of a specific tax year.
A warning is informational only. The permitted contribution can be lower because the limit is also constrained by taxable compensation, contributions to other traditional and Roth IRAs, filing status, and modified adjusted gross income. Rules and dollar limits can change each tax year.
Official references: IRS 2026 retirement contribution announcement and Publication 590-A.
8. Roth IRA tax treatment is not calculated
Roth IRA contributions are not deductible, and qualified distributions may be tax-free when IRS requirements are met. This projection does not apply the five-year rule, withdrawal ordering rules, exceptions, conversion rules, excess-contribution treatment, early-distribution taxes, or state tax law.
The phrase “Roth IRA balance” describes the account being modeled; it does not certify that every future dollar will be available tax-free. For distribution rules, review IRS Publication 590-B.
9. What the model leaves out
The calculator does not model:
- Changing annual contribution limits or catch-up rules
- Income-based eligibility changes
- Employer matches or workplace retirement plans
- Portfolio allocation, rebalancing, dividends, or fund fees
- Taxes, penalties, conversions, rollovers, or withdrawals
- Contribution increases, missed deposits, or retirement spending
- Market volatility or sequence-of-returns risk
10. Appropriate use
Use the calculator to compare assumptions and understand how time, contributions, returns, and inflation interact. Do not use it as an eligibility determination, investment recommendation, tax calculation, or retirement-income plan. Current rules should be checked for the applicable tax year, and individual decisions may warrant help from a qualified financial or tax professional.