About the Roth vs Traditional IRA Calculator
This Roth vs Traditional IRA calculator compares the two account types on a fair, like-for-like basis. You choose how many pre-tax dollars you can set aside each year. A Traditional IRA or 401(k) invests all of it and taxes the withdrawals later; a Roth pays your current income tax first, invests what is left, and lets you withdraw everything tax-free. The calculator grows both accounts at the same return and shows what each is worth after tax on the day you retire.
It is useful for anyone deciding where to put this year’s IRA contribution, choosing between the Roth and pre-tax option in a workplace 401(k), 403(b) or TSP, or weighing a mix of both. The result mostly depends on one comparison: your marginal tax rate today versus the rate you expect to pay on withdrawals in retirement.
Contributions are made monthly and returns compound monthly. The model assumes the same pre-tax budget goes into either account, qualified (tax-free) Roth withdrawals, and that Traditional withdrawals are taxed at a single flat retirement rate. For 2026 the IRA contribution limit is $7,500 ($8,600 at age 50+); income limits apply to direct Roth IRA contributions and to deducting Traditional IRA contributions if you have a workplace plan.
With the default inputs, the after-tax advantage of the better account is $33,077.93. Change any value above to recalculate instantly.
How to use the roth vs traditional ira calculator
- 1Enter the pre-tax amount you can put aside each year.
- 2Enter your current marginal tax rate (federal plus state).
- 3Estimate the tax rate you expect to pay on withdrawals in retirement.
- 4Set an expected return and the number of years until you retire.
- 5Compare the after-tax values and check the break-even tax rate.
Formula and method
Both accounts receive a level monthly contribution that compounds monthly at the same expected return. The Traditional account invests the full pre-tax budget B and its whole balance is taxed at your retirement rate when withdrawn. The Roth account invests only what is left after paying today’s marginal tax, B × (1 − tₙₒw), and withdrawals are tax-free.
Because growth multiplies both amounts by the same factor, the comparison reduces to (1 − tₙₒw) versus (1 − tᵣₑₜ): whichever tax rate is lower wins, and when the rates are equal the two accounts are worth exactly the same. That is why the break-even retirement tax rate equals your current marginal rate. Real-world factors such as RMDs on Traditional accounts, Social Security taxation and state moves can tilt the answer.
- B
- Annual pre-tax budget
- tₙₒw
- Current marginal tax rate
- tᵣₑₜ
- Expected tax rate on withdrawals
- r
- Expected annual return
- n
- Years until retirement
Worked examples
$7,000 a year, 22% now vs 15% later, 25 years at 7%
Investing $7,000 of pre-tax money a year for 25 years at 7% grows the Traditional account to about $472,540; after 15% tax you keep about $401,660. The Roth only receives $5,460 a year after 22% tax and grows to about $368,580. Because you expect a lower tax rate later, Traditional comes out about $33,080 ahead.
Early-career saver: 12% now vs 22% later
A young worker in the 12% bracket who expects a 22% rate later is better off paying tax now. The Roth receives $5,280 a year and grows to about $1.01 million tax-free, while the Traditional account’s $1.15 million shrinks to about $895,000 after tax — a Roth advantage of roughly $114,700.
Same tax rate now and later
When today’s rate and the retirement rate are both 24%, the Roth invests 76% of the budget tax-free while the Traditional invests 100% and later gives up 24%. Both end with the same after-tax value, so the choice rests on other factors like RMDs and flexibility.
Frequently asked questions
Is a Roth or Traditional IRA better?+
It depends mainly on tax rates. If you expect to pay a higher rate in retirement than today, the Roth usually wins; if you expect a lower rate, the Traditional usually wins. Equal rates produce the same after-tax result.
What are the 2026 IRA contribution limits?+
For 2026 you can contribute up to $7,500 across all your Traditional and Roth IRAs, plus a $1,100 catch-up if you are 50 or older, for a total of $8,600. You also need earned income at least equal to the contribution.
Can I contribute to both a Roth and a Traditional IRA?+
Yes. You can split contributions between them in the same year as long as the combined total stays within the annual IRA limit. Many savers do this to hedge against uncertainty about future tax rates.
Does this work for a Roth 401(k) vs a Traditional 401(k)?+
Yes. The math is identical for Roth and pre-tax 401(k), 403(b), 457(b) and TSP contributions. The only difference is the much higher 2026 workplace plan limit of $24,500, plus an $8,000 catch-up at 50+ ($11,250 at ages 60–63).
Why does the calculator give the Roth less money to invest?+
To compare fairly, both options cost you the same amount of take-home pay today. A $7,000 Traditional contribution cuts your tax bill, so the equivalent Roth contribution is $7,000 minus the tax you would pay on it.
Are there income limits for a Roth IRA?+
Yes. For 2026, direct Roth IRA contributions phase out between $153,000 and $168,000 of MAGI for single filers and $242,000–$252,000 for joint filers. Traditional IRA deductions phase out at $81,000–$91,000 (single) and $129,000–$149,000 (joint) if you are covered by a workplace plan. High earners often use a backdoor Roth conversion instead.
Tax results are estimates based on published rules and simplified assumptions. They are not tax advice — check official guidance or a tax professional for your situation.