Why tax-free growth is worth so much
A Roth IRA and an ordinary brokerage account are both funded with after-tax dollars, so dollar-for-dollar they start in the same place. The difference shows up over decades: the taxable account is taxed on its gains, while the Roth’s entire balance — contributions and growth — comes out tax-free. The longer your money compounds, the wider that gap grows, which is exactly what the chart above makes visible.
2026 contribution limits
$7,500 base · +$1,100 catch-up at age 50+ = $8,600 max
The limit is shared across all your traditional and Roth IRAs. This calculator caps your contribution to the applicable limit and flags you if you go over.
Worked example
Take a 30-year-old with $10,000 already in a Roth IRA who contributes $7,000 a year until age 65, earning 7% a year. Here is where the tax-free balance comes from:
| Step | Amount |
|---|---|
| Starting Roth balance at age 30 | $10,000 |
| Annual contributionwithin the $7,500 IRA limit for 2026, added at the end of each year | $7,000 |
| Total contributed over 35 yearsthe starting balance plus every yearly contribution | $255,000 |
| + Tax-free growtha constant 7% annual return compounding for 35 years — none of it ever taxed | $819,424 |
| = Tax-free balance at age 65$122,914 more than the same money in a taxable account, which ends at $951,510 after 15% capital-gains tax | $1,074,424 |
Computed with this calculator's default settings — open the tool above and you'll see the same numbers, then change any input to match your own plan.
Roth IRA growth with real contribution limits
- Real IRA contribution limits. We enforce the 2026 $7,000 limit and the $1,100 catch-up for age 50+, and warn you when your intended contribution exceeds what you can legally put in.
- Roth vs. taxable, quantified. We invest the same dollars at the same return in a taxable brokerage account, tax the gains, and show the dollar "Roth advantage" — the real payoff of tax-free growth.
- Your tax-free number, front and center. The headline is the balance you can actually withdraw tax-free in retirement — not a pre-tax figure that overstates what you keep.
Frequently asked questions
What is a Roth IRA?
A Roth IRA is an individual retirement account you fund with after-tax dollars — you get no deduction today, but in exchange your investments grow completely tax-free and qualified withdrawals in retirement are tax-free too. There are no required minimum distributions during your lifetime, which makes it a powerful long-term and estate-planning vehicle. Because the growth is never taxed, the longer your money compounds, the larger the Roth advantage over an ordinary taxable account.
How much can I contribute to a Roth IRA in 2026?
For 2026 the IRA contribution limit is $7,500 per year. If you are age 50 or older you can add a $1,100 catch-up contribution, for a total of $8,600. This limit is shared across all of your traditional and Roth IRAs combined. This calculator enforces the limit automatically and flags you if the amount you intend to contribute exceeds it, so your projection reflects what you can actually put in.
Why compare a Roth IRA to a taxable brokerage account?
A taxable brokerage account is the most common alternative for after-tax savings, so it is the fair benchmark for measuring a Roth’s real benefit. Both are funded with after-tax dollars, but the taxable account owes tax on its gains while the Roth does not. This calculator invests the same contributions at the same return in both, then taxes the taxable account’s gains, so the difference — the "Roth advantage" — isolates the dollar value of tax-free growth.
Are there income limits on Roth IRA contributions?
Yes. Your ability to contribute directly to a Roth IRA phases out above certain modified adjusted gross income (MAGI) thresholds, which depend on your tax-filing status and are adjusted annually. High earners above the phase-out range cannot contribute directly, though many use a "backdoor" Roth conversion instead. This calculator projects growth and does not compute your eligibility — check the current-year MAGI limits for your filing status before contributing.
When can I withdraw from a Roth IRA tax-free?
You can withdraw your own contributions at any time, tax- and penalty-free, because they were already taxed. To withdraw earnings tax-free, the distribution must be "qualified": the account must have been open for at least five years and you must be at least 59½ (or meet an exception such as disability or a first-home purchase). Non-qualified withdrawals of earnings can trigger income tax and a 10% penalty, so plan withdrawals around these rules.
Sources
The official figures this page quotes are drawn from the primary sources above — check them (or a qualified professional) before relying on a result.
Disclaimer: This calculator is for educational purposes only. It uses simplifying assumptions — notably it taxes the comparison taxable account’s gains once at the end and ignores annual dividend drag, inflation indexing of limits, and your personal MAGI eligibility. Contribution limits, income phase-outs, and tax rates change over time and vary by situation. It is not financial, tax, or investment advice.