Purposeful FIRE🔄Roth vs. Traditional IRA/401(k) Calculator
Compare Roth and Traditional contributions side by side. The right answer depends entirely on whether your tax rate is higher today or in retirement.
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What Is Roth vs. Traditional IRA/401(k)?
The Roth versus Traditional question is one of the most frequently debated topics in personal finance, and the answer is actually mathematically simple once you accept the core principle: if your tax rate is higher today than it will be in retirement, Traditional wins; if it's lower today, Roth wins; if they're the same, the after-tax result is identical.
In practice, most people aren't sure what their retirement tax rate will be, which is what makes this a real planning question rather than a trivial one. This calculator makes the comparison concrete by taking your actual contribution, your actual tax rates, and your actual time horizon, and showing the after-tax dollar outcome for each option side by side.
How This Calculator Works
You enter an annual contribution amount, current and retirement ages, your current marginal tax rate, your expected effective retirement tax rate, and an expected return. The calculator applies the same pre-tax contribution to both accounts, grows it at the same rate for the same number of years, and then applies the relevant tax: Traditional accounts are taxed at your retirement rate on the way out; Roth accounts take the tax hit now (you contribute after-tax dollars), so withdrawals are tax-free.
Personal Considerations
The most common error in this decision isn't a math error, it's a framing error: people compare a pre-tax Traditional contribution against an after-tax Roth contribution and conclude Roth is worse because they're putting in 'less' money. This calculator corrects that by holding the pre-tax contribution constant and showing the after-tax value of each, which is the only fair comparison.
There's also a behavioral case for Roth that doesn't show up in the math: Roth accounts have no required minimum distributions, giving you more control over your taxable income in retirement. For early retirees trying to manage income for ACA subsidy eligibility or Roth conversion ladders, this flexibility has real value that a simple expected-return comparison doesn't capture.
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Frequently Asked Questions
Run the calculator at a few different retirement rates (10%, 15%, 22%) and see where the crossover point is. If your expected retirement income puts you solidly in a lower bracket, Traditional tends to win. If you expect significant non-portfolio income, a large Social Security benefit, or a lot of Traditional account money that will trigger high RMDs, Roth becomes more attractive.
Yes, and for many people this is the right answer. Contributing to Traditional up to the point where the current deduction is most valuable, then routing additional savings to Roth, captures both tax-deferral and tax-diversification benefits.
The core comparison is the same. The mechanics differ (contribution limits, income limits for Roth IRA deductibility, employer match treatment for 401k) but the fundamental tax math is identical.
This calculator uses federal rates only. If your state taxes Traditional withdrawals but not Roth (some states exempt retirement income), Roth is relatively more attractive than the federal-only comparison suggests.