Roth vs Traditional Calculator
Compare the after-tax retirement value of a Roth versus a Traditional account, given your contribution, return and tax rates.
How it works
Growth factor = ((1 + r)^years − 1) ÷ r · Traditional after-tax = contribution × factor × (1 − retirement rate) · Roth after-tax = contribution × (1 − current rate) × factor
This compares putting the same pre-tax income into each account. A Traditional contribution goes in untaxed and compounds, then the whole balance is taxed at your retirement rate on withdrawal. A Roth contribution is taxed at today’s rate first, so fewer dollars go in, but every withdrawal is tax-free. The result turns entirely on tax rates: when your retirement rate is higher than today’s, the Roth wins; when it is lower, the Traditional wins; when the two rates are equal, the accounts end up identical. This model ignores contribution limits, employer matches, required distributions, and the extra value of investing any up-front tax savings a Traditional deduction frees up.
Worked example
Contributing $6,500 a year for 30 years at a 7% return builds a pre-tax balance of about $614,000. At a 22% tax rate today and 24% in retirement, the Roth is worth about $478,900 after tax versus about $466,600 for the Traditional — the Roth edges ahead by roughly $12,300 because it locked in the lower 22% rate now.
Frequently asked questions
Which should I choose, Roth or Traditional?
If you expect to be in a higher tax bracket in retirement than you are now — common for younger or lower-earning savers — the Roth usually wins. If you are in a high bracket now and expect a lower one later, the Traditional deduction tends to win. Many people split contributions to hedge against uncertain future rates.
Why do the accounts tie when tax rates are equal?
Because multiplication is order-independent: taxing before growth or after growth removes the same fraction. Only a difference between your current and future tax rate breaks the tie in one account’s favor.
Does this include the employer match or contribution limits?
No. It is a simplified after-tax comparison. Real accounts have annual limits, employer matches (usually pre-tax), required minimum distributions on Traditional accounts, and income rules — all of which can change the answer. Treat this as a directional guide, not tax advice.
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Educational estimate, not investment or tax advice. Returns are never guaranteed and past performance does not predict the future. Confirm with a licensed advisor. Tax brackets, contribution limits and retirement rules change constantly and depend heavily on your personal situation — this is a simplified model that ignores those details, so confirm any decision with a qualified tax professional before acting.