Roth IRA Retirement Calculator

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How To Use The Roth IRA Retirement Calculator

Simply fill out the fields in the Roth IRA retirement calculator featured above, using a value for each of the following items:

• Starting Balance
• Annual Contribution
• Expected Rate of Return
• Inflation Rate
• Current Age
• Retirement Age
• Number of Years in Retirement
• Expected Rate of Return in Retirement, and
• Expected Inflation Rate in Retirement

Not sure what these terms mean? Not sure what numbers to put in?

Use the section below as a guide for your Roth IRA retirement calculations.

Then, as you fill in each field with numbers customized to your situation, the calculator will automatically update to reveal your projected annual inflation-adjusted income in retirement.

Roth IRA Retirement Calculator Terms

Below is an explanation of each calculator term:

Starting Balance
This is the current balance in your Roth IRA (if you already have one). If you're still considering opening a Roth IRA, put zero in this field (since you don't have an existing balance).

Need an example?

Let's say, you already have $17,000 in your Roth IRA.

If so, then put $17,000 in the "Starting Balance" field.

Annual Contribution
This is the amount you plan to contribute to your Roth IRA on an annual basis.

For example, let's say you plan to contribute $250 per month to your Roth IRA. If so, then put $3,000 in the "Annual Contribution" field.

The default for this field is set to $5,000 because that's the maximum contribution if you're under age 50.

However, the maximum contribution is $6,000 for people age 50 and older. So if you're 50 or older and plan to make the maximum contribution, put $6,000 in the "Annual Contribution" field.

If you're married, and both you and your spouse intend to make the maximum contribution, then input the appropriate amount in this field.

For example, if both you and your spouse are over age 50 and eligible to contribute the maximum amount, then put $12,000 in the "Annual Contribution" field.

Expected Rate of Return
This is the annual compound rate of return you anticipate receiving on your Roth IRA retirement savings. This will vary from person to person based investing strategy, fees, types of investments, and other factors.

However, since most people invest their Roth IRA savings in stocks, the default is set to 10.85% - the annual compound rate of return on the S&P 500 from 1959 to 2003.

If you expect a higher or lower rate of return, adjust accordingly.

Inflation Rate
This is the annual rate of inflation you project for the timeframe in which your Roth IRA savings is invested.

It's important that you don't underestimate the rate of inflation since it will eat away at the purchasing power of your savings over time.

The default rate is set at 4.1% - the approximate annual rate of inflation over the past seven decades.

However, if you're more conservative, you might want to use a higher rate of inflation.

Current Age
This is fairly self-explanatory. Just check your birth certificate if you're not sure!

Seriously, though, you might want to consider an older age for this field if you're not yet investing in your Roth IRA but plan to do so in the future.

Retirement Age
This is the age at which you'd like to retire, and while you'd probably like to make this the same as your current age, that may not be realistic... (although I hope I'm wrong!)

Make sure you put a realistic age in the "Retirement Age" field in order to get the most accurate calculation of your inflation-adjusted Roth IRA retirement savings.

Number of Years In Retirement
This is the number of years you plan to live after you retire.

And while it's impossible to know exactly how many years you have left once you retire, higher figures in this field will make it less likely you run out of retirement savings before you pass on.

For instance, if you plan to retire at age 65. You might want to put 35 years in the "Number of Years In Retirement" field. Given current life expectancies in the United States, reaching age 100 is quite probable.

In fact, you might want to go higher. But regardless of the figure you ultimately choose, it's a good idea to calculate several different scenarios in regard to the length of your retirement.

Expected Rate of Return In Retirement
This is the annual compound rate of return you anticipate receiving on your Roth IRA retirement savings once you retire. This will vary from person to person based on investing strategy, fees, types of investments, and other factors.

However, since most people invest their Roth IRA retirement savings in bonds as they get older and begin to draw down their savings, the default rate is set to 5.0% - the approximate annual compound rate of return on U.S. bonds over the past several decades.

If you expect a higher or lower rate of return, adjust accordingly.

Expected Inflation Rate In Retirement
This is the annual rate of inflation you project for your Roth IRA retirement savings during the time period in which you're retired.

It's important that you don't underestimate the rate of inflation since it will eat away at the purchasing power of your retirement savings over time.

The default rate is set at 4.1% - the approximate annual rate of inflation over the past seven decades.

However, if you're more conservative, you might want to use a higher rate of inflation.

Target Roth IRA Value
This is the projected inflation-adjusted value of your Roth IRA retirement savings when you retire.

The Roth IRA retirement calculator automatically updates this value when you fill in the aforementioned fields.

Annual Income In Retirement
This is the projected inflation-adjusted value of your Roth IRA when you retire.

The Roth IRA retirement calculator automatically updates this value when you fill in the aforementioned fields.

Unlike some Roth IRA calculators, this value represents your savings in terms of today's dollars - meaning a million dollar nest egg will retain the equivalent purchasing power of a million dollars today.

Calculating Your Roth IRA Retirement Income

When using the Roth IRA retirement calculator, keep in mind that its calculations are only as good as the estimated figures you place in the fields above.

Make sure you're realistic in your assumptions, particularly when it comes to the number of years you plan to spend in retirement.

Remember, the less you spend in retirement, the higher your annual annuity.

Likewise, the more years you spend in retirement, the lower your annual annuity.

For instance, if you estimate living for 20 years after you retire, but you end up living 30 years instead, then you'll be broke for the last 10 years of your life!

So make sure your plan is rock solid.

Additional Roth IRA Calculators

Roth IRA Calculator - This is our most basic Roth IRA calculator. Simply input the present value of your Roth IRA, along with your expected annual contributions, age, and rate of return, to get a projected value for your Roth IRA when you reach retirement age.

Roth IRA Contribution Calculator - Use this calculator to determine the dollar amount of the annual contribution you need to make in order to meet your desired Roth IRA retirement balance.

Roth IRA Investment Calculator - Use this calculator to determine the rate of return you need to generate on your Roth IRA savings in order to meet your retirement goal.

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