Roth vs Traditional Calculator

Traditional IRA / 401(k): Contributions are pre-tax (reduce taxable income now). Your balance grows tax-deferred. Withdrawals in retirement are taxed as ordinary income.

Roth IRA / 401(k): Contributions are after-tax (no immediate tax deduction). Your balance grows tax-free. Qualified withdrawals in retirement are completely tax-free.

The core question is: will your tax rate be higher now or in retirement?

If you expect to be in a higher bracket in retirement (e.g., early career, large expected Social Security, significant traditional account balance), Roth is often advantageous. If you expect to be in a lower bracket in retirement (e.g., high earner now, modest retirement spending), traditional may work better.

The honest answer: future tax rates are uncertain, and most advisors suggest some mix of both for tax diversification.

Having a mix of Roth (tax-free) and traditional (taxable) retirement funds gives you flexibility to manage your tax bill in retirement. You can draw from taxable accounts in years when income is low, and from Roth accounts when you need to avoid pushing yourself into a higher bracket.

Many financial planners recommend contributing to both account types, especially if you're unsure about future tax rates.

Tax laws change. Marginal rates, capital gains rules, and RMD regulations have all changed significantly over the past 30 years and will likely change again. No calculator — including this one — can reliably predict what tax rates you'll face in 20–30 years.

Use this calculator to understand the general direction, then consult a tax professional before making major contribution decisions.