Roth IRA Trajectory Calculator
See your Roth IRA future under three different market conditions. Compare optimistic, moderate, and conservative scenarios side by side to build a plan that works in any market environment.
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Set your base case and scenarios
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Why Scenario Planning Beats Single-Point Forecasting
No one can predict future market returns with certainty. Using a single expected return — say 8% — gives you one number that may feel precise but is actually just one possibility on a wide spectrum. Scenario planning provides a range of outcomes that helps you understand the full landscape of possibilities and plan accordingly.
The three-scenario approach (bull, base, bear) is used by professional financial planners and institutional investors. By understanding your best case, most likely case, and worst case, you can make decisions that work across all scenarios rather than betting everything on one optimistic prediction. If your plan works even in the bear case, you can invest with genuine confidence.
Historical Context for Each Scenario
The bull case (10-12% returns) reflects periods like 2009-2024, where equities delivered strong, sustained growth. These periods tend to last 10-15 years and feature low inflation, expanding corporate earnings, and favorable monetary policy. The base case (7-8%) represents the long-term historical average for a diversified portfolio, which is the most commonly used assumption in financial planning.
The bear case (4-6%) reflects periods of elevated inflation, geopolitical instability, or structural economic shifts — like the 2000-2010 "lost decade" where the S&P 500 delivered essentially 0% returns. While uncomfortable, planning for this scenario ensures your retirement is secure even if markets underperform. The good news: even in bear scenarios, consistent Roth IRA contributions still build substantial wealth over 30+ years.
Frequently Asked Questions
Financial planners typically use 7-8% for an all-equity portfolio, which represents the historical average of the S&P 500 minus a small margin of safety. For a balanced portfolio (60/40), use 5.5-6.5%. These are nominal returns; subtract 2-3% for real (inflation-adjusted) returns.
Historically, stock market returns over 20+ year periods have clustered around 8-10%. The bull scenario (12%+) has occurred roughly 25% of the time, the base scenario (6-10%) about 50% of the time, and the bear scenario (under 6%) about 25% of the time for diversified portfolios.
Your core financial plan should be viable in the bear case — this means your basic retirement needs are met. Then, treat the base and bull scenarios as opportunities for a more comfortable retirement, earlier retirement, or legacy building. Planning for the worst while hoping for the best is financially sound.
These projections assume constant returns, but real markets are volatile. Sequence risk matters most near and during retirement. Bad returns early in retirement can devastate a portfolio even if average returns are normal. This is another reason Roth IRAs are valuable — no RMDs means you can avoid selling during downturns.
Yes. To see real (inflation-adjusted) projections, subtract your expected inflation rate (typically 2-3%) from each scenario. So a base case of 8% becomes 5-6% in real terms. The resulting projection shows purchasing power rather than nominal dollars.