Roth vs Traditional Calculator
After-tax outcomes for both accounts, with the traditional tax break invested so the comparison is honest.
With the tax saving invested, this reduces to one question: will your marginal rate be higher now or in retirement? At equal rates the two are mathematically identical, which is the part most comparisons obscure. Contribution limits, income phase-outs, and state tax are not modelled here.
Worked example. $7,000 a year from age 35 to 65 at 7%. Both accounts grow to the same balance. The Roth is yours tax free. The traditional owes tax on withdrawal, but the deduction freed $1,680 a year along the way, and investing that side amount is what makes the two comparable. At equal tax rates they end exactly level; the whole decision is whether your rate is higher now or later.
Frequently asked questions
Which should I choose?
Roth if you expect a higher marginal rate in retirement, traditional if lower. Early career and low bracket favours Roth; peak earning years favour traditional. Splitting between both hedges the fact that nobody knows future tax law.
Why do they tie at equal rates?
Because multiplication commutes. Taxing a dollar before it grows or after it grows gives the same result when the rate is identical, which is why the honest comparison invests the traditional account's tax saving rather than letting it vanish.
Does this include contribution limits?
No. Roth and traditional limits are shared, and Roth IRA eligibility phases out at higher incomes, where a backdoor Roth may be the route. Enter what you can actually contribute.
What about RMDs?
Traditional accounts require minimum distributions from 73; Roth IRAs never do during the owner's lifetime. That flexibility is a real advantage this calculator does not price.
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Calculators model hypothetical outcomes from the inputs you provide. They are informational only, not financial, investment, tax, or legal advice.