Retirement Accounts & Tax

The choice between a Roth IRA and a Traditional IRA is not about which account “grows faster” — they hold the same investments and earn the same pre-tax return. The only variable that determines which wins is your marginal tax rate now versus your marginal tax rate in retirement. The tools in this cluster make that comparison precise and transparent.

Most online Roth vs. Traditional comparisons make a subtle error: they put the same nominal dollar amount into each account. That treats a Roth contribution and a Traditional contribution as equally costly, which they are not. A Traditional deduction gives you a refund at your current rate, so the fair comparison grosses it up to the same after-tax cost. Once you do that, the advantage ratio simplifies to a single formula: (1 − retirement rate) ÷ (1 − current rate). The breakeven is exactly where the two rates are equal.

Start with the Roth vs. Traditional IRA Calculator to see your advantage ratio, the crossover chart, and a year-by-year balance projection.