Roth vs Traditional Calculator
Settle the Roth vs Traditional debate with math: enter your tax rates now and in retirement to see which account leaves you more after taxes.
The entire Roth-vs-Traditional question comes down to one comparison: your marginal tax rate today versus in retirement. Enter both rates plus your contribution, timeline, and return, and the calculator shows the after-tax value of each side by side — including the surprising case where they're exactly tied.
How to use this calculator
- Enter the gross amount you plan to contribute.
- Enter your current marginal tax rate.
- Enter the marginal tax rate you expect in retirement.
- Enter years invested and expected annual return.
- Click Calculate to see each option's after-tax value and the winner.
The formula
Roth = contribution×(1−tax now)×(1+r)^n; Traditional = contribution×(1+r)^n×(1−tax later)
Worked example
A $10,000 contribution over 30 years at 7% with a 22% rate now and 12% in retirement gives $59,375.59 after tax in a Roth versus $66,987.84 in a Traditional — Traditional wins by $7,612.26.
Frequently Asked Questions
When does Roth beat Traditional?
When your tax rate in retirement is higher than your rate today. That's common for young earners whose income — and tax bracket — will rise, or if you expect tax rates generally to increase. Paying tax now at 12% to avoid 24% later is a clear win, and the calculator quantifies exactly how big.
When does Traditional beat Roth?
When your retirement tax rate will be lower than today's — the typical case for peak earners. Deducting at 32% now and withdrawing at 22% later keeps more of every dollar. High earners who expect to drop a bracket or two in retirement usually come out ahead with Traditional.
Why are they tied when the rates are equal?
It's the commutative property of multiplication: Roth computes contribution×(1−tax)×growth, Traditional computes contribution×growth×(1−tax). Same three factors, same result. This is why the whole debate reduces to one question — will your rate be higher or lower later?
What about the tax deduction from Traditional contributions?
This comparison assumes you invest the same gross amount either way. In real life, the Traditional deduction frees up cash — if you invest that tax savings rather than spending it, Traditional's advantage grows. If you'd spend it, the Roth's forced discipline can win behaviorally.
Does this apply to IRAs too?
Yes — the math is identical for Traditional vs Roth IRAs. The only differences are the account rules: contribution limits, income phase-outs, deduction eligibility, and required minimum distributions. Use the IRA calculator for IRA-specific growth projections.