Roth vs Traditional Calculator
Pay the tax now (Roth) or later (traditional)? Compare the money you’d actually have to spend in retirement from an IRA or 401(k), using your own tax rates.
after-tax spending money after 30 years.
Break-even: with equal after-tax cost the two tie exactly when your retirement tax rate equals today’s (22%). Below that traditional wins, above it Roth wins.
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Get a plain-English read of the result above: what drives it, what to try changing. It sends only the numbers in this calculator and your question. Educational only, not financial advice.
The whole decision is one comparison
Multiplication doesn’t care about order: taxing $1,000 at 24% and then growing it gives exactly the same result as growing it and then taxing it at 24%. So with equal after-tax cost the only thing that matters is whether the rate going in beats the rate coming out.
Dead even
Things the tax rates don’t capture
- Income limits: direct Roth IRA contributions phase out above $153,000 (single) / $242,000 (joint) MAGI in 2026. Roth 401(k)s have no income limit.
- RMDs: traditional accounts force withdrawals from age 73 or 75 (see the RMD calculator); Roth IRAs don’t.
- Deductibility: if you or your spouse has a workplace plan, traditional IRA deductions phase out at lower incomes ($81,000–$91,000 single in 2026), and a non-deductible traditional IRA rarely beats a Roth.
- Benefits and credits: lowering your AGI with traditional contributions can increase credits such as the Saver’s Credit or reduce student-loan payments on income-driven plans.
The marginal rate you enter today is the rate on your last dollar of income, not your average rate. Tax brackets are progressive, so a traditional deduction removes income from your top bracket, while retirement withdrawals often fill the lower brackets first. That asymmetry is why traditional contributions often come out ahead for middle earners. To see the top-dollar versus average-dollar gap for yourself, drag an income through the brackets on ahaboo.
Questions people ask
Is a Roth or traditional IRA better?
If your tax rate in retirement will be lower than it is now, traditional usually wins; if it will be higher, Roth wins; if it is the same, they come out equal when you compare the same after-tax cost. The rest is about flexibility: Roth has no lifetime RMDs and tax-free withdrawals, which also helps manage future tax brackets.
Does the same logic apply to a Roth 401(k) vs traditional 401(k)?
Yes. The maths is identical. One difference: because the 401(k) limit is the same dollar amount for both, a maxed-out Roth 401(k) shelters more after-tax money than a maxed-out traditional one, a small advantage for high savers.
Why does the calculator compare “equal after-tax cost”?
A $1,000 traditional contribution only costs you $780 of take-home pay at a 22% rate. To compare fairly, the Roth side contributes $780. If you contribute the same dollar amount to either, tick “same dollar contribution” and the traditional side invests its tax savings in a taxable account.
What tax rate will I have in retirement?
Nobody knows, since laws change. Estimate from your expected retirement income: withdrawals, Social Security (up to 85% taxable) and pensions. Many people land in a similar or lower bracket; heavy savers with large pre-tax balances can land higher because of RMDs.
Can I have both?
Yes, and many planners suggest it: holding both pre-tax and Roth money gives you “tax diversification”, letting you choose which to draw from each year to stay in a lower bracket.