Roth vs. Traditional IRA Calculator
The Roth-versus-Traditional decision comes down to one question: is your tax rate higher now or in retirement? This calculator compares the two accounts on an after-tax basis so you can see which actually leaves you with more money to spend.
A Roth is funded with after-tax dollars and grows tax-free; a Traditional is funded pre-tax and taxed on withdrawal. When your tax rate is the same now and later, they are mathematically equivalent — the calculator shows exactly where that breaks in your favor.
Traditional comes out ahead
$1,066 more
Difference in after-tax value at withdrawal.
- Roth (after-tax)
- $53,286
- Traditional (after-tax)
- $54,352
- — from the account
- $41,563
- — from reinvested tax savings
- $12,789
Calculation Formulas
A Roth is funded with after-tax dollars and grows tax-free, so the full balance is yours — no tax at withdrawal.
Example:
$7,000 for 30 years at 7% → $7,000 × 1.07³⁰ ≈ $53,286, all tax-free.
A Traditional is pre-tax and taxed on withdrawal at your retirement rate. The up-front deduction (C × t_now) can be invested alongside; with it reinvested, equal tax rates make the two accounts equivalent.
The decision hinges on whether your marginal tax rate is higher now or in retirement.
Key Figures
| Figure | Value | Description |
|---|---|---|
| 2026 IRA limit | $7,500 | Combined across all IRAs; $8,600 with the $1,100 age-50 catch-up. |
| 2026 Roth phase-out (single) | $153k–$168k | MAGI range over which Roth IRA eligibility phases out for single filers. |
| 2026 Roth phase-out (MFJ) | $242k–$252k | MAGI phase-out range for married filing jointly. |
| Equivalence point | t_now = t_ret | When today’s and retirement tax rates match (and savings are reinvested), Roth and Traditional produce identical after-tax results. |
Note: Results are estimates for planning purposes. Rates, fees, taxes, and insurance vary by lender and location — confirm exact figures with a licensed professional before making financial decisions.
Standards & Sources
Last verified: July 2026
- IRS Notice 2025-67
The 2026 IRA contribution limit, catch-up, and Roth/Traditional income phase-out ranges are from IRS Notice 2025-67, effective January 1, 2026.
- After-tax equivalence
The comparison follows the standard result that Roth and Traditional are equivalent when the marginal tax rate is unchanged and the Traditional deduction is reinvested — a well-established principle in retirement-planning literature.
How to Use This Calculator
- Enter the amount you plan to contribute and the number of years until you withdraw it.
- Enter your expected annual investment return.
- Enter your marginal tax rate now and the rate you expect in retirement — this is the decisive input.
- Choose whether the Traditional tax savings are reinvested, then compare the after-tax value of each account.
Frequently Asked Questions
Is a Roth or Traditional IRA better?
It depends on your tax rate now versus in retirement. A Roth wins if you expect a higher tax rate later (you lock in today’s lower rate); a Traditional wins if you expect a lower rate in retirement. When the two rates are equal, the accounts are mathematically equivalent.
What is the 2026 IRA contribution limit?
For 2026 you can contribute $7,500 across all your IRAs, or $8,600 if you are 50 or older (a $1,100 catch-up). The limit is the same whether you choose Roth, Traditional, or split between them.
Can I contribute to a Roth IRA at any income?
No — Roth IRA eligibility phases out at higher incomes. For 2026 the phase-out is $153,000–$168,000 of MAGI for single filers and $242,000–$252,000 for married filing jointly. Above the top of the range you cannot contribute directly, though a backdoor Roth may be an option.
Why does the calculator ask if I reinvest the Traditional tax savings?
A Traditional contribution gives you an up-front tax deduction. To compare the two accounts fairly, that tax saving should be invested too — otherwise you are comparing a fully-taxed Roth against a Traditional whose tax break was spent. With the savings reinvested, equal tax rates produce equal results.
Can I contribute to both a Roth and a Traditional IRA?
Yes, but your combined contributions across both cannot exceed the annual limit ($7,500, or $8,600 if 50+, for 2026). Many savers split contributions to diversify their future tax exposure.
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