Roth vs. Traditional IRA Calculator
Roth and Traditional IRAs are taxed at opposite ends: one now, one later. Slide your contribution, time horizon, return, and your tax rates today and in retirement to see which leaves more in hand. The answer hinges on how your future tax rate compares to todays.
How this math works
A Traditional IRA grows with pre-tax dollars and is taxed at your retirement rate when you withdraw, so we grow the full contribution and apply that rate at the end. A Roth IRA is funded with after-tax dollars, so we first reduce each contribution by your current tax rate, then let it grow and come out tax-free.
The comparison really turns on one question: will your tax rate be higher or lower in retirement. Roth wins when your retirement rate is equal to or higher than today, because paying the tax now at a lower rate beats paying more later.
Common questions
Which is better, Roth or Traditional?
It depends on your tax rates. Roth tends to win if your tax rate in retirement is the same or higher than today, while Traditional can win if you expect a much lower rate later.
Why is the Roth contribution reduced?
Roth dollars are taxed before they go in, so a given paycheck buys a smaller after-tax contribution. We reflect that by trimming the Roth deposit by your current tax rate for a fair comparison.
Does this include contribution limits?
No. The tool compares growth at the amount you choose and does not enforce IRS annual limits, so check current limits before deciding how much to contribute.
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