Roth vs Traditional Calculator

Using the roth vs traditional estimate

This comparison starts with the same pre-tax contribution budget and asks how taxation changes the projected spendable retirement value. A traditional contribution invests that budget before the modeled retirement tax; the Roth side first reduces the contribution by the current tax assumption. Both then use the same return and horizon. This is a tax-rate comparison, not a full account-selection recommendation or a forecast of future tax policy.

Step-by-step inputs

1. Yearly contribution (pre-tax dollars). Use the same pre-tax dollars available each year. This is not a comparison of identical deposited amounts in both accounts. Starting example: $7,000 .
2. Years until retirement. Enter the annual contribution horizon. The model uses repeated contributions and a constant return, without a withdrawal schedule. Starting example: 30 .
3. Expected return (%/yr). Apply one hypothetical return to both sides so the comparison isolates the tax treatment. Starting example: 7 .
4. Tax rate now (%). Enter the tax-rate assumption applied before the Roth deposit. A real incremental contribution may span more than one tax bracket. Starting example: 22 .
5. Tax rate in retirement (%). Enter the assumed tax on the traditional balance at retirement. Actual withdrawals can be taxed differently across years and income brackets. Starting example: 15 .

Worked example with the starting values

Using the starting inputs, the estimate is Traditional leaves you more by: $49,526 .

The traditional side grows the full annual budget and then applies the retirement tax assumption. The Roth side grows an annual deposit reduced by current tax. The headline shows the difference between the two after-tax estimates, while the breakdown identifies each account's projected value.

Traditional, after tax

$601,385

Roth, after tax

$551,859

Compare tax rate in retirement (%) scenarios

All other inputs stay at their starting values. These are modeled comparisons, not quotes, predictions or individual recommendations.

Make a useful comparison

Compare equal tax rates as a baseline. Under this model, identical tax rates and otherwise identical assumptions make the after-tax results align. Then test lower and higher retirement tax assumptions to see which part of the decision depends on future taxes.

Check eligibility and deductibility before interpreting the traditional estimate. Not every contribution receives the assumed upfront tax benefit, and Roth eligibility or workplace plan access can change the available choices. This calculator does not enforce those rules.

Consider flexibility as well as the largest modeled balance. Future income, benefits, required distributions and tax diversification can matter. The tool does not model a mixed strategy or the year-by-year tax consequences of retirement withdrawals.

Common mistakes to avoid

• Comparing equal deposited dollars is a different question from comparing equal pre-tax budgets. Mixing the two can make one side appear better for the wrong reason.
• The model assumes the Roth side is available under the intended tax treatment. Qualification and withdrawal rules still apply.
• A single retirement tax percentage cannot reproduce progressive tax brackets across a long retirement. It is a sensitivity assumption, not a tax forecast.