A Roth IRA is a smart way to increase your savings for the future. These investment accounts offer tax-free income when you retire. Of course, any return you get in a Roth IRA depends on the investments you make in it, but historically these accounts have achieved, on average, a return of between 7 and 10%. The total contributions from your traditional IRA also affect the average rate of return, as it worsens over time.

Roth IRA returns are not guaranteed, but if you look at the historical returns for each asset class and compare them with your asset allocation, you can calculate your expected rate of return. There's one more thing to consider when looking at the return on a Roth IRA or any investment account, and it's not just how much you earn, but how much of those profits you get while accumulating over time and then how much you stay after taxes. Here's what you need to know about the average return on a Roth IRA and how it can help you maximize your retirement savings. While long-term savings in a Roth IRA may result in better after-tax returns, a traditional IRA can be an excellent alternative if you qualify for a tax deduction.

The best way to estimate the returns of your Roth IRA is to look at the average historical returns for each asset class using market indices. However, the average income in traditional IRAs will also be influenced by the factors listed below. For example, a traditional bank can only offer Roth IRAs as a certificate of deposit, which usually has a lower rate of return.