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Roth vs Traditional IRA Calculator

Compare Roth and Traditional IRA outcomes after taxes based on your current and expected retirement tax rates.

After-Tax Advantage

+$79,694

Roth Future Value

$442,743

Traditional Future Value

$363,049

Winner

Roth IRA Wins

After-tax advantage

$79,694

at retirement in this projection

Decision support

Recommended

Interpretation

After taxes, Roth contributions could be worth about $79,693.79 more than Traditional IRA savings at retirement, assuming a 18% withdrawal tax rate.

Recommendation

Based on these projections, Roth produces about $79,693.79 more after tax even though your current tax rate is higher than expected in retirement. This model uses equal contribution amounts and does not reinvest Traditional tax savings; if you invest the upfront deduction each year, Traditional could become more competitive.

Key risk

Future tax rates, contribution limits, and whether you reinvest Traditional tax savings can change the outcome significantly.

Assumptions

Assumes equal annual contributions, constant returns, no contribution limits or income phase-outs, and a single lump-sum tax on Traditional withdrawals. Does not model Required Minimum Distributions or state taxes.

Roth IRAs are funded with after-tax dollars and grow tax-free. Traditional IRAs offer a tax deduction now but withdrawals are taxed in retirement. The better choice depends on whether you expect to be in a higher or lower tax bracket later.

How to use this calculator

  1. Enter your current income and marginal tax rate.
  2. Enter your expected tax rate in retirement.
  3. Enter annual contribution, years until retirement, and expected return.
  4. Compare after-tax values and read the recommendation.

Formula

Both accounts grow contributions at the expected return. Roth value is fully tax-free at withdrawal. Traditional value is reduced by the expected retirement tax rate. This compares equal contribution amounts to each account type.

Example

Contributing $7,000/year for 25 years at 7% yields about $473,000 in a Roth. The same Traditional balance after a 18% retirement tax rate is worth roughly $388,000 after tax — a Roth advantage of about $85,000 in this scenario.

Frequently asked questions

When is Roth better?
Roth often wins when your current tax rate is lower than your expected retirement rate, or when you want tax-free withdrawals and flexibility in retirement.
When is Traditional better?
Traditional often wins when you are in a high tax bracket now and expect a lower rate in retirement, since the upfront deduction saves more taxes today.

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