Roth vs Traditional IRA Calculator

Compare after-tax retirement value across Roth and Traditional accounts given current and retirement tax rates.

Your scenario

$

The Traditional equivalent with the same pre-tax outlay is computed automatically.

24%
22%
7.0%
30 years
Roth after-tax
$707,511
Traditional after-tax
$726,130
Gross: $930,936
Difference
-$18,619
Traditional wins

After-tax value over time

How this calculator works

The comparison holds pre-tax outlay constant between the two accounts. A Roth contribution is made with after-tax dollars, so the Traditional equivalent with the same pre-tax cash flow is the Roth contribution divided by (1 − current tax rate). Both accounts compound at the same expected return for the specified number of years.

At retirement, the Roth balance is entirely after-tax (withdrawals are tax-free). The Traditional balance is multiplied by (1 − retirement tax rate) to show after-tax value. The calculator declares a winner based on the after-tax ending balances.

When Roth beats Traditional (and vice versa)

The Roth vs Traditional question reduces to comparing your current marginal tax rate to your expected marginal tax rate in retirement. If today's rate is higher, Traditional wins — you get the deduction now at a high rate and pay tax on withdrawals later at a lower rate. If today's rate is lower, Roth wins — you pay tax now at a low rate and withdraw tax-free at a higher rate.

For most people, this comparison is not perfectly symmetric in practice. Roth has some hidden advantages: no required minimum distributions (RMDs), better estate planning outcomes, and flexibility during retirement to manage your tax bracket year by year. Traditional's advantage — the upfront deduction — is straightforward to calculate but requires discipline to invest the tax savings, which many people don't do.

A useful rule of thumb: if you're in the 24% federal bracket or higher, the Traditional deduction is usually worth taking unless you're certain your retirement tax rate will be meaningfully higher. If you're in the 12% or 22% bracket, Roth typically wins because it's unlikely your retirement bracket will be significantly lower than today. High earners in peak-income years who plan for much lower retirement spending tend to benefit most from Traditional.

Many financial planners recommend a blended approach: contribute to both Traditional and Roth accounts to give your future self flexibility. In retirement, you can blend withdrawals to control your tax bracket, funding low-tax years from Traditional and high-tax years (or Medicare IRMAA thresholds) from Roth.

Frequently Asked Questions

What's the 2025 IRA contribution limit?
$7,000 for those under 50, $8,000 for those 50 and older (catch-up of $1,000). These limits apply to the combined total of Roth and Traditional IRA contributions, not per account.
Are there income limits for Roth IRA contributions?
Yes. For 2025, single filers can contribute fully up to $150,000 MAGI, with a phase-out to $165,000. Married filing jointly phases out from $236,000 to $246,000. Above these limits, direct Roth contributions are prohibited — though the 'backdoor Roth' conversion strategy remains available.
What's the backdoor Roth?
A strategy where high earners contribute to a non-deductible Traditional IRA (no income limit) and immediately convert it to a Roth IRA. The tax impact is minimal if converted quickly with no earnings accrued. The strategy requires care if you have existing pre-tax IRA balances due to the pro-rata rule.
Can I contribute to both Roth and Traditional IRA?
Yes, but the combined total can't exceed the annual limit ($7K or $8K for 2025). Many people split contributions to balance current tax savings and future tax-free growth.
What's the Roth's estate planning advantage?
Roth IRAs have no required minimum distributions (RMDs) for the original owner, allowing tax-free growth for the owner's lifetime. Inherited Roth IRAs also pass tax-free (though recent SECURE Act rules limit the inherited distribution window). Traditional IRAs require RMDs starting at 73, forcing taxable withdrawals whether needed or not.