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Traditional vs Roth Calculator

↻ Updated 2026

Should you pay tax now (Roth) or later (traditional)? Compare the after-tax value of each for the same out-of-pocket cost, based on your tax rate today and in retirement.

Educational calculators — always consult a licensed professional before making financial decisions.

Your inputs

Annual contribution (out of pocket)

After-tax dollars you can set aside each year

Years until retirement

Expected annual return

Marginal tax rate now

Rate on your last dollar of income today

Expected tax rate in retirement

Traditional wins

+$18,619

more after-tax at retirement

Roth ending value

$707,511

tax-free

Traditional (after tax)

$726,130

taxed at 22%

After-tax value at retirement

Roth$707,511

Traditional (after tax)$726,130

How the two compare

Your out-of-pocket cost (both)$210,000

Roth contribution / year$7,000

Traditional contribution / year$9,211

Extra invested via traditional deduction$66,316

Roth ending value (tax-free)$707,511

Traditional after retirement tax$726,130

ASSUMPTIONS — Both options cost you the same $7,000 of take-home money each year. The traditional deduction lets you contribute $9,211pre-tax for the same cost; that grows tax-deferred and is taxed at your retirement rate on withdrawal. Roth is funded with after-tax dollars and withdrawn tax-free. If your retirement tax rate is lower than today's, traditional tends to win; if higher, Roth wins. Excludes RMDs, state taxes and income limits.

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How to read the traditional vs Roth comparison

This is a fair fight, which most versions of this comparison are not. Both sides cost you the same take-home money; the traditional side simply buys a bigger contribution with the deduction and hands some of it back at withdrawal. At the defaults traditional wins by $18,619 — because 22% in retirement is less than 24% today.

Set both tax rates to the same number and the two columns land on exactly the same dollar. That's not a coincidence — it's the algebra, and it's the single most useful thing on this page.

The only thing that decides the winner is the gap between your rate now and your rate later. Return and time scale both sides identically; they change the size of the prize, never who takes it.

Your rate today is your marginal rate — the rate on your last dollar, not your average. Look it up with the effective vs marginal rate calculator before guessing.

How the after-tax value of Roth and traditional is compared

The trick is holding your out-of-pocket cost constant. If you can part with $7,000 of take-home pay, that buys exactly $7,000 into a Roth — those dollars are already taxed. The same $7,000 of take-home buys a larger traditional contribution, because the deduction refunds the tax you'd have paid on it: at a 24% rate, $7,000 after tax is $9,211 before tax.

Then both grow at the same rate for the same years, and the traditional side pays income tax on the whole balance at withdrawal. Compare what's left.

roth end = contribution × ((1+return)^years − 1) ÷ return × (1+return) traditional contribution = contribution ÷ (1 − rate now) traditional gross = same growth formula, on the larger contribution traditional end = traditional gross × (1 − rate later) winner = whichever end value is larger

contribution: The after-tax money you can set aside each year — identical out-of-pocket cost for both options — that's what makes the comparison fair
rate now: Your marginal tax rate today — the rate the deduction refunds you at — your top bracket, not your effective rate
rate later: The rate you expect to pay on withdrawals in retirement — applied to the entire traditional balance, principal and growth alike
return: Expected annual return, nominal, identical for both — it scales both sides by the same factor, so it can't pick a winner
years: Years of growth before you withdraw — same for both sides
traditional gross: The pre-tax traditional balance before the retirement tax bill — always the larger number — and always the more misleading one

Why equal rates produce an exact tie: the traditional side multiplies the contribution by 1 ÷ (1 − rate now) going in and by (1 − rate later) coming out. When the two rates are equal those factors cancel exactly, and multiplication doesn't care about order — 30 years of compounding in between changes nothing. The entire traditional-versus-Roth question is therefore one question: will your rate be higher or lower later? If the answer is "lower", traditional wins by exactly the ratio between the rates. See the Roth IRA calculator for what the tax-free side looks like on its own.

Worked examples

Example: $7,000 a year for 30 years, 24% now and 22% later

The calculator's defaults. You have $7,000 of after-tax money a year to commit, a 7% return, and you expect to drop one bracket by retirement.

Your cost, either way$7,000 × 30 — identical for both columns	$210,000
Roth contribution / yearalready-taxed dollars	$7,000
Traditional contribution / year$7,000 ÷ (1 − 0.24)	$9,211
Extra invested via the deduction($9,211 − $7,000) × 30	$66,316
Roth ending valuetax-free	$707,511
Traditional grossbefore the tax bill	$930,936
Traditional after 22% tax$930,936 × 0.78	$726,130
Traditional advantage2.6% more than the Roth	$18,619

Traditional wins by $18,619 — the whole margin is the two-point rate drop, cashed in 30 years later. Note the trap in the middle of the table: the traditional gross of $930,936 is $223,425 bigger than the Roth, and almost all of that gap belongs to the IRS.

Example: the same person retires in the 32% bracket instead

Nothing changes except the expected retirement rate — 32% rather than 22%. Same $7,000 cost, same 30 years, same 7% return, same 24% rate today.

Roth ending valueunchanged — the Roth doesn't care about future rates	$707,511
Traditional grossalso unchanged	$930,936
Traditional after 32% tax$930,936 × 0.68	$633,036
Roth advantagea $93,094 swing from the first example	$74,475

A ten-point move in one input flips the winner and swings the margin by $93,094. Set the retirement rate to 24% instead and both columns read exactly $707,511. That's the honest summary of this calculator: it's a machine for turning one guess about the future into a dollar figure, and the guess is doing all the work.

Frequently asked questions

Traditional or Roth 401(k) — which is better?

Neither, universally. Better is defined entirely by whether your marginal rate is higher today or in retirement — the calculator above reduces to that one comparison, and at equal rates the two are mathematically identical to the dollar.

The commonly-published shorthand runs: expect a lower rate later, take the deduction now; expect a higher rate later, pay the tax now. What that shorthand omits is that a Roth also removes a future unknown. You're not just betting on your own income — you're betting on where Congress sets rates in thirty years. A Roth ends that conversation; a traditional account leaves it open. The IRS Roth Comparison Chart sets out the mechanical differences between the account types.

Will my tax rate actually be lower in retirement?

Usually, but less reliably than the traditional pitch assumes, and the exceptions cluster among exactly the people who save the most. Payroll tax stops, and most people's income drops — that's the case for the default assumption.

Against it: a large traditional balance eventually forces withdrawals whether you want the income or not. RMDs begin in your seventies and are calculated from the balance, not from your spending — a big enough account can push you into a bracket you never occupied while working, stacked on top of taxable Social Security. The RMD calculator shows what that forced income looks like. This is why the tax-diversification argument exists: holding both means choosing which account to draw from each year, rather than being told.

Can I contribute to both a traditional and a Roth IRA in the same year?

Yes, but they share one limit. For 2026 that's $7,500 across all your IRAs combined, or $8,600 from the year you turn 50 (IRS Notice 2025-67) — split however you like, $3,750 each or any other division. It is not $7,500 apiece.

The two account types have different gates. Traditional IRA contributions have no income limit, though whether they're deductible depends on your income and on whether you're covered by a workplace plan — and a non-deductible traditional contribution loses the entire premise of this calculator, since there's no deduction to buy the larger contribution with. Roth contributions have an income limit outright.

Does the employer match change the traditional vs Roth answer?

Not the comparison, but it outranks it. Employer matching contributions go into a pre-tax account regardless of whether your own deferrals are traditional or Roth — so the match is traditional money either way, and capturing it comes before choosing a flavour. The employer match calculator values that first step.

One wrinkle this calculator's framing doesn't handle: the equal-out-of-pocket logic only works if you actually invest the deduction. Contribute $7,000 pre-tax and spend the tax refund, and you haven't run this comparison at all — you've run a smaller one. Inside a 401(k) the point is often moot, because both flavours share the same $24,500 deferral limit and the limit binds before your budget does.

Where this comparison stops being realistic

The model is deliberately austere — two tax rates and a growth curve. That clarity is its value and also its blind spot.

One tax rate for all of retirement — The whole traditional balance is taxed at a single rate. In reality withdrawals fill brackets from the bottom up, so the first dollars are taxed at 10% and only the last at your marginal rate — which generally makes traditional look better than this model shows. Entering your marginal rate in the "rate in retirement" field is the conservative choice, not the accurate one.
Contributions can exceed the legal limit — At the defaults, the traditional column contributes $9,211 a year — above the 2026 IRA limit of $7,500. The calculator doesn't cap either side, so at higher out-of-pocket amounts it can compare two contributions you're not allowed to make.
No state tax — Both rates are federal only. Moving between a high-tax and a no-tax state between now and retirement can swing the answer harder than the federal gap does, and it's a variable the model has no field for.
RMDs — The traditional balance is assumed to be withdrawn on your schedule. It isn't — required minimum distributions start in your seventies and are set by the IRS Uniform Lifetime Table, not by your plans. Roth IRAs have no RMDs for the original owner, which is a real advantage this comparison never counts.
Nothing about the years in between — The model jumps from contribution to withdrawal. It ignores the window where a Roth conversion at a low rate might beat both columns, and it ignores that Roth contributions — unlike earnings — can be withdrawn at any time.