To estimate this, we need to assume an average annual return (since Roth IRA growth depends on investments). A common long-term estimate is about 7% per year.
Step 1: Contributions phase (24 years)
You invest:
- $5,000 per year
- For 24 years
Future value after 24 years at 7%:
- ≈ $290,000
Step 2: Growth phase (no new contributions, 40 more years)
Let that $290K keep growing for 40 years at 7%:
- Growth factor ≈ 1.07?? ≈ 15
- Final value ≈ $4.3 million
Final Estimate
- ≈ $4.3 million after 64 total years (24 years investing + 40 years growth)
How sensitive this is to returns
If returns differ, the outcome changes a lot:
- 5% return: ≈ $1.7 million
- 7% return: ≈ $4.3 million
- 9% return: ≈ $10+ million
