Should you contribute to a Roth or Traditional retirement account? Compare the after-tax outcomes based on your current tax rate, expected retirement tax rate, contribution amount, and time horizon.
Roth and Traditional retirement accounts both offer tax advantages, but they apply the break at opposite ends of the timeline. With a Traditional 401(k) or IRA, you skip the tax now and pay it later, when you withdraw in retirement. With a Roth account, you pay the tax now and withdraw tax-free in retirement.
If your contribution amount is the same dollar figure in both accounts — say, $7,000 a year — and your tax rate never changes, the after-tax outcome is mathematically identical. The decision only matters because tax rates change: yours over your career, and federal brackets across decades of policy shifts.
This calculator compares the after-tax retirement balance from each strategy using your current marginal rate, the rate you expect in retirement, and a constant contribution. It assumes the Traditional tax savings are also invested in a taxable account — otherwise the comparison is unfair. Run the numbers, but also read the "when to use" section, because the decision often depends on factors that don't appear in the math.
Age 28, 35 years to retirement, contributing $7,000/year, 7% return. Current marginal rate: 12% Expected retirement rate: 22% Roth IRA balance at 63: ≈ $968,000 (all tax-free) Traditional IRA balance at 63: ≈ $968,000, but withdrawn at 22% = ≈ $755,000 after tax Roth wins by $213,000. The early-career low bracket is exactly when Roth pays off.
Age 45, 20 years to retirement, contributing $7,000/year, 7% return. Current marginal rate: 32% (federal) + 6% (state) = 38% Expected retirement rate: 22% Roth: $7,000/year compounded → ≈ $307,000 tax-free at 65. Traditional: contributing the same $7,000 pre-tax (which costs $4,340 out of pocket vs $7,000 for Roth) → $307,000 pre-tax × (1 − 0.22) = $239,500 after tax. If you compare equal out-of-pocket and invest the tax savings in a taxable account at the same return, Traditional comes out about $25,000–$35,000 ahead — assuming retirement rate is actually lower.
Same worker, same income, but unsure whether retirement rate will be 18% (frugal lifestyle) or 28% (rising federal rates). 50% Roth / 50% Traditional gives you two buckets to draw from in retirement. In low-income years (early retirement, before Social Security), pull from Traditional and use the standard deduction to keep tax low. In high-income years (large RMDs, big purchases), pull tax-free from Roth. This is what financial planners mean by "tax diversification" — it hedges against the one variable you can't predict: future tax policy.
Use this calculator when you have a Roth and a Traditional option available — most modern 401(k) plans now offer both, and IRA contributions can be either type subject to income limits. The output is best understood as a directional answer rather than a precise dollar comparison, because the actual answer depends on tax rates 20+ years from now that no one knows.
Reach for Roth when: your current tax bracket is unusually low (early career, sabbatical year, large deductions), you expect to be in a higher bracket in retirement (large pension, big taxable balances, expected rate increases), or you value the optionality of tax-free withdrawals later.
Reach for Traditional when: you are in a peak-earning year and want to drop into a lower bracket, you expect to retire at a much lower income, or you want the immediate cash-flow benefit of a smaller tax bill now (which can be redirected to additional savings).
For most people in the middle of their career, the answer is "do some of each" — split contributions to build both buckets. Pair this calculator with the IRA, 401(k), and retirement savings calculators to model the full picture.
Compare Traditional vs Roth IRA growth and tax implications over time.
Estimate your 401(k) balance at retirement with employer matching and investment growth.
Project your retirement savings growth and see if you are on track.
Calculate annuity payments from a lump sum or how much to invest for desired payments.
Estimate your 403(b) retirement savings for nonprofit and education employees.
Compare Roth 401(k) and Traditional 401(k) to see which gives you more in retirement.
Roth Balance (Tax-Free)
$360,039
Traditional (After Tax)
$369,514
Advantage
Traditional by $9,475
Tax Savings Now (Traditional)
$42,000
| Year | Roth Balance | Traditional (Pre-Tax) | Traditional (After Tax) |
|---|---|---|---|
| 1 | $5,692.40 | $7,490.00 | $5,842.20 |
| 2 | $11,783.27 | $15,504.30 | $12,093.35 |
| 3 | $18,300.50 | $24,079.60 | $18,782.09 |
| 4 | $25,273.93 | $33,255.17 | $25,939.03 |
| 5 | $32,735.51 | $43,073.04 | $33,596.97 |
| 6 | $40,719.39 | $53,578.15 | $41,790.96 |
| 7 | $49,262.15 | $64,818.62 | $50,558.52 |
| 8 | $58,402.90 | $76,845.92 | $59,939.82 |
| 9 | $68,183.50 | $89,715.14 | $69,977.81 |
| 10 | $78,648.75 | $103,485.20 | $80,718.45 |
| 11 | $89,846.56 | $118,219.16 | $92,210.94 |
| 12 | $101,828.22 | $133,984.50 | $104,507.91 |