Roth vs Traditional IRA Calculator

Traditional IRA contributions may reduce taxable income now when eligibility rules allow; withdrawals in retirement are taxed as ordinary income. Roth contributions are made with after-tax dollars; qualified withdrawals are tax-free. The better choice depends on current vs expected future tax rates.

This calculator models equal annual contributions growing at a fixed return, taxing Traditional withdrawals at a single future rate. It ignores RMDs, employer plans, income limits, state taxes, and contribution phase-outs — real planning needs a tax professional.

Example: $6,000/year for 30 years at 7% growth yields very different after-tax balances depending on whether you pay tax upfront (Roth) or at withdrawal (Traditional). Higher future tax rates favor Roth; lower future rates favor Traditional.

Tax bracket timing is the core trade-off. Roth wins when your marginal rate in retirement is higher than today — you paid tax at a lower rate upfront. Traditional wins when you deduct in a high bracket now and withdraw in a lower bracket later.

Roth avoids required minimum distributions on the Roth balance itself and leaves tax-free assets for heirs under current rules — estate planning can matter as much as bracket math.

Traditional deductibility may phase out if you or a spouse has a workplace retirement plan and income exceeds IRS limits. Roth contributions phase out at higher incomes — eligibility rules change with tax law.

Worked example — equal brackets: $500/month, 25 years, 7% return, 22% tax now and later → Roth and Traditional after-tax totals can be similar when rates match. Raise future tax to 32% and Roth pulls ahead; drop future tax to 12% and Traditional wins.

Employer 401(k) match is almost always Traditional when received as pre-tax — this IRA comparison does not replace maximizing match dollars first.

Not tax advice. Consult a CPA or fiduciary planner for personalized retirement contribution strategy.

Backdoor Roth strategies exist for high earners above direct Roth limits — involves Traditional contribution and conversion with separate tax considerations.

State tax treatment of retirement withdrawals varies — no-tax states favor Traditional less on withdrawal if you might relocate.

Required minimum distributions on Traditional IRAs start at IRS-defined ages — RMDs force taxable withdrawals that Roth IRAs avoid on the Roth balance.

Mega backdoor Roth via after-tax 401(k) contributions is employer-plan dependent — outside scope here but relevant for high earners maxing pre-tax space.

Heir tax treatment of inherited IRAs changed with SECURE Act rules — Roth heirs may still face RMD schedules on inherited accounts depending on beneficiary type.

Spousal IRAs let non-working spouses contribute based on working spouse income — eligibility and deductibility follow IRS rules not modeled in this growth-only comparison.

State income tax on Traditional withdrawals in high-tax states can push future marginal rates above today’s — Roth contributions look better when you expect higher state and federal tax in retirement.

Traditional deductible contributions reduce current AGI — Roth does not. High earners near phase-out limits may lose deductibility, changing which account type actually saves tax today.

State tax migration in retirement changes Traditional withdrawal tax — modeling a single future rate may miss lower-tax states if you plan to relocate after career peak earning years.

Roth conversion ladders during early retirement bridge years are a separate strategy — this calculator compares steady contributions, not one-time conversions spread across tax brackets.

Healthcare subsidies (ACA premium tax credits) tie to MAGI — Traditional withdrawals can reduce credits; Roth withdrawals of contributions may avoid MAGI spikes in some planning windows.

Tax law changes can alter Roth versus Traditional advantage — sensitivity-test several future rate scenarios rather than betting on one marginal rate forever.

Required minimum distributions eventually force Traditional withdrawals that can bump retirees into higher brackets — Roth balances can stay invested without RMD pressure on the Roth portion under current rules.

Spousal beneficiary rules differ for inherited IRAs — estate planning can shift the Roth versus Traditional advantage across generations beyond this contribution growth snapshot.