How this number is made
An IRA grows like any other account: a starting balance, an annual contribution, and a return. This page splits the annual contribution into monthly deposits. It does not enforce the contribution limit, which depends on the year, your age, and your income. Roth and traditional differ in the tax, not in this growth.
- Stay under the limit yourself. The default contribution is a round number, not a published cap.
- The return is an assumption. A bond IRA and a stock IRA should not share a rate just because both are IRAs.
Formula
The yearly contribution is divided by 12 and compounded monthly on top of the starting balance.
Worked example
With the figures already in the form, balance if the return holds is $364,455.
Questions
Where is the tax deduction?
A traditional IRA deduction lowers this year’s taxable income. It does not change the balance inside the account. The Roth-versus-traditional page is about that choice.
What about a catch-up contribution?
Type the total you are allowed to put in. The page will grow whatever you type.