Roth vs Traditional IRA Calculator
See exactly which IRA leaves you richer in retirement — after taxes. The winner depends on your current versus future tax bracket, and the difference over 30 years can be tens of thousands of dollars.
After-tax value over time
Year-by-year after-tax value
| Age | Roth (net) | Traditional (net) | Difference |
|---|
How the math actually works
Roth vs Traditional isn't a returns question — both accounts grow at the same rate. It's a tax timing question.
Roth IRA
You contribute after-tax dollars (say $7,000 from a paycheck where you already paid income tax). That money grows tax-free, and at retirement you withdraw every dollar tax-free. What you see is what you get.
Traditional IRA
You contribute pre-tax dollars (up to $7,000/year deductible for most people). Your income tax bill this year drops by $7,000 × your marginal tax rate. But at retirement, every dollar you withdraw is taxed as ordinary income at whatever bracket you're in then.
The apples-to-apples trap
A naive comparison — "$7,000 into Roth vs $7,000 into Traditional" — rewards Traditional too little. Why? A $7,000 Traditional contribution costs the same take-home pay as a $7,000 × (1 − tax rate) Roth contribution, because you get a tax refund. If you invest that refund in a taxable brokerage, you have more total money working for you under Traditional.
That's why the "apples-to-apples" checkbox is on by default. It models the Traditional side with a separate taxable side account holding the annual tax savings, and applies capital gains tax when you liquidate it at retirement. This is the fair comparison financial advisors use.
Quick decision guide
- Retirement bracket < today's bracket: Traditional usually wins. You're deferring tax at a high rate and paying it at a lower one.
- Retirement bracket > today's bracket: Roth wins. You're paying tax now while cheap and locking in tax-free growth.
- Roughly the same: Slight edge to Roth because of flexibility (no required minimum distributions during your lifetime) and the fact that current bracket is known while future rates are a guess.
- Early career, expecting big income growth: Roth — you're likely at your lowest lifetime tax rate right now.
- Late career, peak earnings: Traditional — defer tax now at the top of the bracket ladder.
Frequently asked questions
What's the difference between a Roth and Traditional IRA?
Traditional IRA contributions are made pre-tax (deductible in most cases), reducing your taxable income today. Withdrawals in retirement are taxed as ordinary income. Roth IRA contributions are made with after-tax dollars — no deduction today — but all qualified withdrawals in retirement are 100% tax-free, including all the growth.
Which is better for me — Roth or Traditional?
The simple rule: if you expect your tax rate in retirement to be lower than it is today, Traditional usually wins. If you expect it to be higher (or the same) — or you're early in your career with lots of growth ahead — Roth usually wins. This calculator lets you compare both outcomes head-to-head at your specific tax rates.
What are the 2024 IRA contribution limits?
The 2024 IRA contribution limit is $7,000/year across all your IRAs combined ($8,000 if you're 50 or older). The Roth IRA has income limits — contributions phase out between $146,000 and $161,000 for single filers, and $230,000 to $240,000 for married filing jointly. Traditional IRA deductions phase out too if you're covered by a workplace retirement plan.
What's the 'apples-to-apples' comparison?
The fairest comparison treats the tax savings from a Traditional contribution as extra money you can invest in a taxable side account. In this calculator, we bake that into the 'equivalent contribution' setting: turn it on to model a Traditional IRA where the tax deduction gets reinvested (this is the most rigorous comparison and usually shifts the result toward Traditional if your current tax rate is high).
Can I have both a Roth and a Traditional IRA?
Yes. Many people split contributions across both to diversify their future tax exposure — you don't have to pick one. The $7,000 annual limit applies to the total across all IRAs, not each one. Splitting gives you flexibility to choose which pot to draw from in retirement based on tax rules at that time.
What return rate should I use?
The S&P 500 has averaged around 10% nominal / 7% real (after inflation) over the long term. Many advisors use 7% for planning. For a more conservative balanced portfolio, 5–6% is reasonable. This calculator uses the same return rate for both accounts, so relative outcomes don't change with the rate — but absolute values do.
Projections for educational purposes only. This calculator assumes a constant rate of return, constant contributions, no employer plan interactions, and simplified capital gains treatment on the side account. Actual outcomes depend on market performance, tax law changes, state taxes, income limits, and personal circumstances. Consult a qualified tax or financial advisor before deciding.