Roth vs Traditional Breakeven Age Calculator
Find the retirement tax rate at which a Roth and a Traditional contribution break even, and see which wins for your situation.
How it works
Roth = C(1+r)^t · Traditional = C ÷ (1 − now) × (1+r)^t × (1 − retire) · Breakeven when retire rate = now rate
When the same out-of-pocket amount is invested, the pure Roth-versus-Traditional decision collapses to one comparison: your tax rate now versus your tax rate at withdrawal. The account balance grows identically; only the timing of the tax changes. If your rate is lower in retirement, Traditional wins; if higher, Roth wins; and they break even exactly when the two rates match. Everything else — the balance, the years, the return — cancels out.
Worked example
Contributing $7,000 at a 24% rate today, growing 7% for 25 years: the Roth ends at $37,996 tax-free. The same take-home in a Traditional account grows to $50,000 pre-tax and, taxed at 22% in retirement, nets $39,000 — so Traditional wins by about $1,000 because the retirement rate is lower.
Frequently asked questions
What is the breakeven point?
When your tax rate in retirement equals your tax rate today. Below that, Traditional wins because you deducted at a higher rate than you pay; above it, Roth wins.
Why does the account balance not matter?
Because taxing the money before it grows or after it grows produces the same result when the rate is unchanged. Only a difference between your now and later rates tips the scale.
Are there reasons to pick Roth beyond the math?
Yes — Roths have no required minimum distributions, give tax-free income that does not push up Medicare or Social Security taxation, and hedge against future rate increases. Those can justify a Roth even at a small mathematical disadvantage.
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Educational estimate using simplified assumptions — real returns, taxes and fees vary. Not financial advice.