Calculyn

Roth vs Traditional Calculator

Compare a Roth and a traditional 401(k) or IRA based on your tax rate now and in retirement.

$

Results update as you type.

Traditional leaves you more by

$49,526
Traditional, after tax
$601,385
Roth, after tax
$551,859
  • Traditional52%
  • Roth48%
Traditional leaves you more by$49,526

Results are estimates for planning and are not financial advice.

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Quick answer

$7,000 a year for 30 years at 7%: traditional grows to about $707,000 and nets about $601,000 after a 15% retirement tax; Roth nets about $552,000 after paying 22% now. Traditional leaves you about $49,000 more.

How it works

Traditional accounts give you a tax break now and tax withdrawals later; Roth accounts are the reverse. With the same pre-tax dollars, whichever side has the lower tax rate wins — so the real question is whether you expect your tax rate to be higher now or in retirement.

Formula

Traditional = FV(contribution) × (1 − retirement tax)
Roth = FV(contribution × (1 − current tax))

Assumptions & limitations

  • Results are rounded for display.

Frequently asked questions

Why not just always pick Roth?

If your tax rate is higher today than it will be in retirement, the traditional deduction is worth more. Many people split contributions to hedge.