Roth vs. Traditional IRA Calculator

Pay tax now, or pay tax later?

Every dollar you put toward retirement gets taxed exactly once — the only question is when. A Traditional IRA lets you invest pre-tax dollars today and pay income tax on everything you withdraw in retirement. A Roth IRA flips it: you pay tax on the money now, invest what’s left, and withdraw it all tax-free later. This calculator compares the two head-to-head so you can see, in real dollars, which choice leaves you with more spendable money.

How the math works

The comparison starts from the same amount of pre-tax income each year, which keeps it fair. For the Traditional side, the full contribution compounds at your expected return, then the ending balance is reduced by your retirement tax rate. For the Roth side, your current tax rate comes out first, the smaller after-tax amount compounds for the same number of years, and nothing is taxed at withdrawal. When both tax rates are identical, the results are identical — the winner is decided almost entirely by whether your tax rate is higher now or in retirement. Everything runs privately in your browser; nothing is sent anywhere.

How to use it

1. Enter your planned annual contribution in pre-tax dollars.
2. Set how many years you’ll contribute before retiring.
3. Choose an expected annual return — 6–8% is a common long-term stock assumption.
4. Enter your current marginal tax rate and your best guess for retirement, then compare the two after-tax values and the verdict card.

This tool provides simplified estimates only and is not financial, tax, or legal advice — talk to a qualified professional before making retirement decisions.

FAQ

Why does the winner depend only on tax rates?

Because both accounts compound at the same return for the same years, the growth factor cancels out. If your retirement rate is lower than today’s, Traditional wins; if it’s higher, Roth wins; if equal, it’s a tie.

What tax rate should I use?

Use your marginal rate — the rate on your last dollar earned — not your average rate. For retirement, estimate based on expected income and remember rates and brackets can change.

Does this include IRA contribution limits?

No. It accepts any amount so you can model 401(k)-style contributions too. Check current IRS limits before contributing.

Are there other reasons to pick a Roth?

Yes — Roth IRAs have no required minimum distributions, and tax-free withdrawals add flexibility if future tax rates rise. Many savers hedge by holding some of each.