Roth vs. Traditional IRA Calculator
Enter your contribution, return, and tax rates to find out which account type leaves you with more after-tax income in retirement — and see exactly where the crossover is.
View 2 — Same cost today (headline)
Each account receives the same after-tax outlay. The Traditional contribution is grossed up by 1/(1 − 22%) = 1.282× so the tax deduction makes it equivalent in cash cost.
Traditional pre-tax balance: $908,277 (grossed-up contribution: $9,615/yr)
View 1 — Same nominal amount
Both accounts get the same dollar amount per year — but not the same after-tax cost. The Traditional deduction reduces its real cost by $1,650/yr.
Traditional upfront tax saving: $1,650/yr
Advantage curve — where the crossover is
The curve shows the Traditional-to-Roth spendable ratio at every retirement rate, holding your current rate fixed at 22%. The dot marks your scenario. Breakeven is where the curve crosses 1.0× — i.e., where retirement rate equals current rate.
Year-by-year Roth balance
| Year | Invested to date | Roth balance |
|---|---|---|
| 1 | $7,500 | $7,500 |
| 2 | $15,000 | $15,525 |
| 3 | $22,500 | $24,112 |
| 4 | $30,000 | $33,300 |
| 5 | $37,500 | $43,131 |
| 6 | $45,000 | $53,650 |
| 7 | $52,500 | $64,905 |
| 8 | $60,000 | $76,949 |
| 9 | $67,500 | $89,835 |
| 10 | $75,000 | $103,623 |
| 11 | $82,500 | $118,377 |
| 12 | $90,000 | $134,163 |
| 13 | $97,500 | $151,055 |
| 14 | $105,000 | $169,129 |
| 15 | $112,500 | $188,468 |
| 16 | $120,000 | $209,160 |
| 17 | $127,500 | $231,302 |
| 18 | $135,000 | $254,993 |
| 19 | $142,500 | $280,342 |
| 20 | $150,000 | $307,466 |
| 21 | $157,500 | $336,489 |
| 22 | $165,000 | $367,543 |
| 23 | $172,500 | $400,771 |
| 24 | $180,000 | $436,325 |
| 25 | $187,500 | $474,368 |
| 26 | $195,000 | $515,074 |
| 27 | $202,500 | $558,629 |
| 28 | $210,000 | $605,233 |
| 29 | $217,500 | $655,099 |
| 30 | $225,000 | $708,456 |
The math behind the comparison
The Roth vs. Traditional question comes down to one thing: are you better off paying taxes now (Roth) or later (Traditional)? That depends on whether your marginal tax rate in retirement will be higher or lower than your rate today.
Why "same amount" vs. "same cost" matters
Most online comparisons make a subtle but important error: they put the same nominal dollar amount into each account. That is not a fair comparison. A $7,000 Traditional contribution costs you less than $7,000 out of pocket, because the deduction gives you a refund at your current tax rate. The correct comparison grosses up the Traditional contribution so both accounts have the same after-tax cost to you today.
Once you make that adjustment — what this calculator calls View 2 (Same cost today) — the math simplifies elegantly. The advantage ratio is just:
ratio = (1 − retirement rate) ÷ (1 − current rate)
This ratio does not depend on the amount you contribute, the return rate, or the number of years — only on the two tax rates. If the ratio is above 1, Traditional wins. If it is below 1, Roth wins. The breakeven is exactly where the two rates are equal.
The formula
This tool uses the standard future value of an ordinary annuity, compounded annually:
B = P·(1 + r)^n + C·[(1 + r)^n − 1] ÷ r
B = future value; P = starting balance; r = annual return; n = years; C = annual contribution (end of year). When r = 0: B = P + C·n.
By the linearity of this formula, multiplying both P and C by any constant k multiplies B by k exactly. That is why the grossed-up Traditional balance is simply B / (1 − current rate) — a scalar multiple, computed analytically without a second engine call.
Roth
Contributions are made after tax. The account grows tax-free and all withdrawals in retirement are tax-free. After-tax spendable = B.
Traditional
Contributions are pre-tax (deductible). The account grows tax-deferred. Withdrawals are taxed as ordinary income in retirement. View 2 after-tax spendable = B / (1 − current rate) × (1 − retirement rate) = B × (1 − retirement rate) / (1 − current rate).
Assumptions and limitations
- Annual compounding only. IRA contributions grow annually in this model; intra-year compounding is not modeled.
- End-of-year contributions. Each annual contribution is added at year-end (ordinary annuity). Beginning-of-year (annuity due) is not supported.
- Marginal rates only. The calculator uses a single marginal rate for both periods. Effective rates (the average across all brackets) can differ, especially if retirement income is low and spans multiple brackets.
- Identical investment return. The model assumes the same pre-tax return in both accounts. In practice, a Traditional account may hold a larger nominal balance, allowing slightly different asset allocation.
- No state taxes, no RMDs, no Roth conversion modeling. Required minimum distributions from Traditional accounts at age 73 can push retirees into higher brackets and favor Roth — not modeled here.
- 2026 U.S. federal brackets only. State income taxes, Social Security taxation thresholds, and Medicare IRMAA surcharges are all outside the scope of this tool.
- Contribution limits. The 2026 IRA contribution limit is $7,000 ($8,000 if age 50+). Income limits apply for Roth IRA eligibility and Traditional deductibility.
Sources: IRS Publication 590-A/590-B · Bogleheads: Traditional versus Roth
This tool is for informational and educational purposes only. It is not financial, tax, or legal advice. Consult a qualified advisor before making contribution decisions.
Frequently asked questions
If my tax rate stays the same in retirement, does it matter which I choose?
Mathematically, no — when the current and retirement rates are equal, the after-tax outcome is identical. But "same rate" is hard to guarantee. Traditional accounts require minimum distributions starting at age 73 (per SECURE 2.0), which can push retirees into higher brackets. Roth accounts have no RMDs and tax-free withdrawals, providing flexibility. When rates are equal, many planners favor Roth for the optionality.
What does 'same after-tax cost' mean?
A $7,000 Traditional IRA contribution costs less than $7,000 out of pocket because the deduction reduces your current tax bill. A fair comparison requires the Traditional contribution to be grossed up so both options cost the same after-tax. At a 22% marginal rate, a $7,000 net cost corresponds to a $7,000 Roth contribution or an $8,974 Traditional contribution ($7,000 / (1 − 0.22)). This is View 2 in the calculator — the correct apples-to-apples comparison.
Should I worry about Required Minimum Distributions?
Yes. Traditional IRAs require annual minimum distributions starting at age 73 (per SECURE 2.0). RMDs are taxable income and can push retirees into higher brackets, trigger Medicare premium surcharges (IRMAA), and increase the taxability of Social Security benefits. Roth IRAs have no RMDs during the account holder's lifetime. These effects are not modeled here — they favor Roth more than this calculator shows, especially at high balances.
Can I contribute to both a Roth and a Traditional IRA in the same year?
Yes, but the combined contribution across all your IRAs cannot exceed the annual limit ($7,500 in 2026 per IRS Notice 2025-67; $8,600 if age 50 or older). Income limits also apply: Roth IRA contributions phase out between $150,000 and $165,000 (single/HoH) and $236,000 and $246,000 (MFJ) in 2026. Verify current limits at irs.gov before contributing.
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