How the projection works
A Roth IRA balance is the future value of your current savings plus the future value of each year's contribution, all compounding at your expected return. Contributions are assumed at the end of each year (an ordinary annuity):
where P is the current balance, C the annual contribution, r the yearly return and n the number of years.
Worked example
Starting with $15,000, adding $7,000 a year for 30 years at a 7% return:
2025 contribution limits
| Who | 2025 limit |
|---|---|
| Under age 50 | $7,000 |
| Age 50 or older (catch-up) | $8,000 |
| High earners | Reduced or phased out by income |
Why the Roth structure helps
Because you contribute after-tax dollars, qualified withdrawals in retirement — both your contributions and decades of compounded growth — are tax-free. There are also no required minimum distributions during your lifetime, so the account can keep growing untouched. That makes a Roth especially attractive if you expect to be in the same or a higher tax bracket later.