Roth vs Traditional IRA Calculator
Compare the after-tax value of a Roth vs Traditional IRA for your tax situation.
How to use
- Enter your annual contribution and years until withdrawal.
- Enter your expected return, current tax rate, and retirement tax rate.
- Click Calculate to compare both accounts after taxes — and get a recommendation.
Simplified estimate only — not financial advice. Annual contribution limits, income phase-outs, and withdrawal rules are not modeled. Verify important decisions with a qualified professional.
What Is a Roth vs Traditional IRA Calculator?
A Roth vs Traditional IRA calculator compares the after-tax retirement value of the two account types, so you can see which one likely leaves you with more spendable money. The difference between them is entirely about when tax is paid. A traditional IRA contribution is usually tax-deductible now, grows tax-deferred, and is taxed as income when withdrawn in retirement. A Roth IRA contribution is made with money already taxed, grows tax-free, and qualified withdrawals in retirement are completely tax-free. Same investments, different tax timing — and the right choice hinges on one comparison: your tax rate today versus your tax rate in retirement.
That is why this calculator asks for both rates. If your retirement tax rate will be lower than today's, paying tax later at the cheaper rate (traditional) wins. If your retirement rate will be higher — common for early-career savers now in low brackets, or for anyone expecting tax rates to rise — paying today's cheaper rate (Roth) wins. If the rates are equal, the two come out mathematically identical on the same gross contribution, a result that surprises many people and that the calculator demonstrates cleanly.
How to Use the Roth vs Traditional Calculator
- Enter the annual contribution you plan to make — entered as a pre-tax amount for the traditional side, so the comparison is fair.
- Enter the years until withdrawal and your expected annual return.
- Enter your current marginal tax rate and the rate you expect to pay in retirement.
- Click Calculate to compare the after-tax value of each account at withdrawal.
Factors Beyond the Tax Rate
Real life adds wrinkles the rate comparison alone misses. Roth IRAs have no required minimum distributions during the owner's lifetime and offer flexibility because contributions (though not earnings) can generally be withdrawn at any time without penalty. Traditional IRAs eventually force taxable withdrawals. Income limits can restrict who may deduct a traditional contribution or contribute to a Roth directly, and employer plans have their own rules. Many savers deliberately hold both types — tax diversification — so retirement withdrawals can be managed year by year against whatever tax law and income they actually face.
Tips for Choosing
- Early in your career, when your bracket is likely the lowest it will ever be, the Roth side often has the edge — decades of tax-free growth amplify it.
- In peak earning years with a high current bracket, the immediate traditional deduction is frequently worth more.
- Remember the contribution limits are the same nominal number for both, which quietly favors Roth: a maximum Roth contribution is all after-tax money, effectively sheltering more.
Which is better, a Roth or a traditional IRA?
Whichever faces the lower tax rate. If your tax rate in retirement will be lower than today, the traditional IRA's delayed tax bill is cheaper. If your retirement rate will be higher, the Roth's pay-now approach wins. The calculator runs your specific rates so you can see the size of the difference, which is sometimes smaller than people expect.
Can I contribute to both a Roth and a traditional IRA?
Yes, provided you are eligible for each — but the combined contributions across both cannot exceed the annual IRA limit for your age. Many people split contributions deliberately to have both pre-tax and after-tax money available in retirement.
What tax rate should I enter for retirement?
Use your best estimate of your marginal rate on withdrawals in retirement, considering pensions, Social Security taxation, and other income. If you have no idea, test several scenarios — the calculator's real value is showing how the verdict changes as the retirement rate moves above or below your current rate.
Are there income limits for these accounts?
Yes. Roth IRA contributions phase out above certain incomes, and the deductibility of traditional IRA contributions can be limited if you (or your spouse) are covered by a workplace plan and earn above set thresholds. The limits adjust over time, so check the current figures with the IRS before contributing near them.