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Roth IRA Growth Calculator
See how much tax-free wealth you can build — and what your money could look like at retirement.
Your Numbers
S&P 500 has averaged ~10%/year historically. 7% is a conservative estimate.
This calculator is for educational purposes only and does not constitute financial or tax advice.
Contribution limits and tax laws may change. Consult a qualified financial advisor for your situation.
What Is a Roth IRA?
A Roth IRA is a retirement savings account that lets your money grow completely tax-free. You contribute money you’ve already paid taxes on, and when you withdraw it in retirement, you pay zero federal income tax — not on the gains, not on the interest, not on any of it. That’s the deal that makes it so powerful for hourly workers and anyone building wealth from scratch.
It was created by Senator William Roth in 1997 and has been one of the best wealth-building tools available to everyday Americans ever since.
Roth IRA vs. Traditional IRA: What’s the Difference?
| Feature | Roth IRA | Traditional IRA |
|---|---|---|
| Tax on contributions | After-tax (no deduction) | Pre-tax (tax deductible) |
| Tax on withdrawals | 100% tax-free | Taxed as income |
| Required distributions | None | Required at age 73 |
| Early withdrawal of contributions | Anytime, penalty-free | 10% penalty before 59½ |
| Best for | Those expecting higher taxes later | Those in a high tax bracket now |
2026 Roth IRA Contribution Limits
These limits apply across all your IRAs combined — Roth and Traditional. So if you contribute $3,000 to a Traditional IRA, you can only put $4,000 into a Roth IRA that same year.
Income limits also apply. In 2026, single filers earning over $150,000 and married filers earning over $236,000 may have reduced or no Roth IRA eligibility. Check IRS guidelines or consult a tax professional if you’re near these thresholds.
5 Reasons a Roth IRA Is Perfect for Hourly Workers
If your income grows over time, you’ll pay more in taxes later. A Roth locks in today’s lower rate — you pay tax now and never again.
Unlike a 401(k) or Traditional IRA, you’re never forced to take money out. It can keep growing tax-free for your entire life and pass to your heirs.
You can withdraw the money you contributed (not the earnings) at any time without taxes or penalties. That flexibility makes it a solid emergency backup for people without a big cushion.
Index funds, ETFs, individual stocks, even Bitcoin and Ethereum at some brokers. You control where your money goes.
Even $100/month started at 25 grows to over $350,000 by 65 at a 7% return. The calculator above isn’t exaggerating — compounding is genuinely that powerful.
Where to Open a Roth IRA
You need a brokerage account to open a Roth IRA. Here are the best options for people who are just getting started:
Zero account minimums, zero-fee index funds, and you can hold crypto inside your Roth IRA. Our top pick for most people. Read our Fidelity review.
Fidelity’s robo-advisor automatically manages your portfolio for you. Free under $25,000. Great if you want to set it and forget it.
Rounds up your purchases and invests the spare change. Includes a Roth IRA option. Great for people who struggle to save consistently. Read our Acorns review.
Frequently Asked Questions
Yes. They’re completely separate accounts with separate contribution limits. Many financial experts recommend maxing your 401(k) match first (free money), then contributing to a Roth IRA.
The IRS charges a 6% penalty on any excess contribution for each year it stays in the account. If you over-contribute, withdraw the excess before the tax filing deadline to avoid the penalty.
You can withdraw earnings tax-free and penalty-free once you’re at least 59½ years old AND your account has been open for at least 5 years. This is called a qualified distribution.
The account itself is SIPC-insured up to $500,000 if your brokerage fails. The investments inside the account (stocks, funds) can go up and down with the market — that’s normal. Long-term, the market has always recovered and grown.
Look into the “backdoor Roth IRA” strategy — contributing to a Traditional IRA first, then converting it to a Roth. It’s legal and commonly used by higher earners. Talk to a tax professional before doing this.
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