Roth vs Traditional Calculator

A traditional account gives you a deduction today and taxes the withdrawal later. A Roth account gives you nothing today and taxes nothing later. The money is the same either way until you ask one question: will your tax rate be lower when you take it out, or higher?

The two accounts end up equal

$552,596

$7,500 a year for 30 years at 7%, after tax

Traditional, after tax: $552,596
Roth, after tax: $552,596
Taxable brokerage: $415,999
Break-even retirement rate: 22%

What each account is worth after tax

Traditional$552,596
Roth$552,596
Taxable$415,999

All three start from the same pre-tax dollar. The comparison is only fair if the traditional contribution is the pre-tax amount and the other two receive what is left after the tax bill is paid.

The three accounts side by side

Measure	Traditional	Roth	Taxable brokerage
Money committed	$225,000	$175,500	$175,500
Balance at the end	$708,456	$552,596	$458,440
Tax paid in total	$155,860	$49,500	$91,941
After-tax value	$552,596	$552,596	$415,999
Kept per $1 of pre-tax pay	73.68x	73.68x	55.47x

The taxable account pays tax on dividends and realised gains every year, which shrinks the amount left to compound, and then pays capital gains tax on the remaining gain at the end.

Who wins at other retirement tax rates

Rate in retirement	Traditional after tax	Roth after tax	Difference	Winner
10%	$637,610	$552,596	+$85,015	Traditional
12%	$623,441	$552,596	+$70,846	Traditional
22%	$552,596	$552,596	+$0	Either
24%	$538,426	$552,596	−$14,169	Roth
32%	$481,750	$552,596	−$70,846	Roth
37%	$446,327	$552,596	−$106,268	Roth

The break-even sits at your rate today, 22%: a lower rate in retirement favours the deduction, a higher one favours paying the tax now.

The 2026 limits that apply

Account	2026 limit	Note
IRA	$7,500	Plus $1,100 from age 50
401(k), 403(b), 457	$24,500	Plus $8,000 from 50, or $11,250 at 60 to 63
SIMPLE IRA	$17,000	$4,000 catch-up from 50
Roth IRA income phase-out	$153,000 – $168,000	Single and head of household
Roth IRA phase-out, joint	$242,000 – $252,000	Married filing jointly

Figures for tax year 2026 from IRS Notice 2025-67. The Roth IRA limit is shared with the traditional IRA: the total across both cannot exceed the annual IRA limit.

With the same rate now and in retirement the two accounts are worth exactly the same, which is not an accident: a deduction is worth the rate today and the withdrawal is taxed at the rate then. A Roth IRA has no lifetime required minimum distributions, while a traditional account must start distributions in your 70s, and Roth balances can be passed to heirs without income tax. Having both kinds of account gives you a choice about which pot to draw from in any given year.

JavaScript is off, so the values above are the built-in defaults. Every formula used on this page is documented below, so you can still follow the maths by hand.

This calculator compares the two, and a taxable brokerage account as a third option, on the same pre-tax dollar. It reports the after-tax value of each, the tax rate at which the first two break even, and what happens across a range of possible retirement rates.

How this roth vs traditional calculator works

Why the same dollar is the only fair comparison

A $7,500 traditional contribution costs you $7,500 of pre-tax pay. A Roth contribution of $7,500 costs you $7,500 plus the tax on it, so it really costs about $9,600 of pre-tax pay at a 22% rate. Comparing the two balances directly would give the Roth an unfair advantage.

This calculator equalises the pre-tax cost: the Roth and taxable accounts receive what is left after tax is paid, so all three columns start from the same pay packet and can be compared line by line.

The break-even rule

The deduction is worth your rate today, and the withdrawal is taxed at your rate then. Multiply out and the two cancel when the rates are equal, whatever the return and whatever the number of years. That is why the break-even rate is simply your current marginal rate.

Only two things move the answer: a lower rate in retirement favours the traditional deduction, and a higher rate favours paying the tax now. Everything else in the comparison is a tax rate that happens to be paid by someone else in time.

The 2026 limits and the Roth IRA phase-out

The IRA limit for 2026 is $7,500 with a $1,100 catch-up from age 50, and the 401(k) elective deferral limit is $24,500 with an $8,000 catch-up from 50 and $11,250 for ages 60 to 63 (IRS Notice 2025-67). A Roth 401(k) shares the same deferral limit as a traditional one.

Direct Roth IRA contributions phase out between $153,000 and $168,000 of modified adjusted gross income for single filers, and between $242,000 and $252,000 for married couples filing jointly. Above those ranges a backdoor Roth contribution is the usual route, and the traditional account holds the money in the meantime.

Differences the arithmetic does not capture

A Roth IRA has no lifetime required minimum distributions; a traditional account must start paying them out in your 70s, whether or not the money is needed. A Roth balance can also be left to heirs free of income tax, though inherited accounts have their own distribution rules.

Roth contributions can be withdrawn at any time without tax or penalty, which makes them a partial emergency fund; earnings follow the ordinary rules. Traditional withdrawals before 59½ are normally taxed and hit with a 10% penalty. Having both kinds of account lets you manage which pot funds a given year.

Worked examples

Each example below was run through the calculator on this page when the site was built, so the numbers match what you see when you enter the same inputs.

$7,500 a year for 30 years, 22% now and in retirement

Contribution per year: $7,500.00
Years invested: 30
Annual return: 7%
Marginal rate now: 22%
Marginal rate in retirement: 22%
Capital gains rate: 15%
Tax a taxable account pays each year: 15%

The two accounts end up equal

$552,596

$7,500 a year for 30 years at 7%, after tax

Traditional, after tax: $552,596
Roth, after tax: $552,596
Taxable brokerage: $415,999
Break-even retirement rate: 22%

Identical rates produce identical after-tax results, which is the break-even case. The taxable account still trails both, because it pays tax every year on dividends and gains.

A high earner who expects a lower rate later

Contribution per year: $24,500.00
Years invested: 25
Annual return: 7%
Marginal rate now: 32%
Marginal rate in retirement: 22%
Capital gains rate: 15%
Tax a taxable account pays each year: 15%

Traditional comes out ahead by

$154,960.14

$24,500 a year for 25 years at 7%, after tax

Traditional, after tax: $1,208,689
Roth, after tax: $1,053,729
Taxable brokerage: $833,963
Break-even retirement rate: 32%

Ten percentage points of rate difference is worth a great deal on this size of contribution: the deduction saves at 32% and the withdrawal is taxed at 22%, so the traditional account wins by a wide margin.

A young saver who expects higher taxes later

Contribution per year: $7,500.00
Years invested: 40
Annual return: 7%
Marginal rate now: 12%
Marginal rate in retirement: 24%
Capital gains rate: 15%
Tax a taxable account pays each year: 15%

Roth comes out ahead by

$179,671.60

$7,500 a year for 40 years at 7%, after tax

Traditional, after tax: $1,137,920
Roth, after tax: $1,317,592
Taxable brokerage: $896,980
Break-even retirement rate: 12%

Paying tax at 12% now to avoid 24% later is the Roth case in its purest form, and forty years of tax-free compounding on top widens the gap further.

Frequently asked questions

What is the difference between a Roth and a traditional IRA?

A traditional IRA is funded with pre-tax money: you may be able to deduct the contribution, and withdrawals are taxed as ordinary income. A Roth IRA is funded with after-tax money, grows tax-free and comes out tax-free in retirement, provided the account has been open five years and you are 59½ or older.

What is my break-even tax rate?

It is your marginal rate today. Whoever pays the tax, it is the same total: deduct at 22% now and pay 22% later and you have exactly what you would have had by paying 22% now and withdrawing tax-free. Below that rate in retirement the traditional account wins, above it the Roth wins.

What are the IRA contribution limits for 2026?

The limit is $7,500, plus a $1,100 catch-up from age 50, so $8,600 in total. The same limit covers Roth and traditional IRAs combined, and it is a personal limit: a married couple can each contribute the full amount into their own accounts.

Are there income limits on Roth IRA contributions?

Yes. For 2026 direct contributions phase out between $153,000 and $168,000 of modified adjusted gross income for single filers and heads of household, and between $242,000 and $252,000 for married couples filing jointly. Above the top of the range, the backdoor route — a non-deductible traditional contribution converted to Roth — is the usual approach.

Should I convert an existing traditional account to Roth?

A conversion is a voluntary decision to pay tax now on a balance that would otherwise be taxed later, so it makes sense in a year when your income is unusually low, or if you expect higher rates and want to move a slice at a time. Converting a large balance in a high-income year usually costs more than it saves, so this calculator compares account choices rather than conversion timing.

Why does the taxable brokerage account fall behind?

It pays tax every year on dividends and realised gains, which removes money that would otherwise keep compounding, and then it pays capital gains tax on what is left at the end. A share of that tax can be deferred by not selling, which is why the drag rate matters: index funds with low turnover come closest to the tax-advantaged accounts.

Do required minimum distributions change the answer?

They can. A traditional account must start paying out in your 70s whether or not you need the income, which can push you into a higher bracket and increase the tax on Social Security benefits. A Roth IRA has no lifetime required minimum distributions, which is part of why a mix of both account types is a common recommendation.

Assumptions and sources

2026 IRA and 401(k) limits, including the Roth IRA income phase-out ranges ($153,000–$168,000 single, $242,000–$252,000 joint): IRS Notice 2025-67, announced 13 November 2025.
Contribution, deduction, conversion and distribution rules: IRS Publication 590-A (contributions) and 590-B (distributions), including the five-year rule and the treatment of Roth withdrawals.
This is not tax advice or investment advice. The model applies flat marginal rates to the whole balance, ignores bracket progression, state income tax, the Roth five-year clocks and any limitation on deductions for a covered workplace plan.
The taxable account comparison assumes the account pays tax on its yearly return at the rate entered and then capital gains tax on the remaining gain; it does not model tax-loss harvesting, qualified dividend rates or step-up in basis at death.

Last reviewed 2026-09-14. This page is an estimate tool, not financial, tax or legal advice.Read the full disclaimer.

401(k) CalculatorInvesting & SavingsSee what your deferral and your employer match add up to, which 2026 limit applies at your age, and what the balance becomes by retirement.Open calculator →Retirement CalculatorInvesting & SavingsProject your retirement balance from monthly saving, work out the nest egg your spending needs, and see how long the money lasts once withdrawals start.Open calculator →Compound Interest CalculatorInvesting & SavingsSee how a lump sum and regular deposits compound over time, what the effective annual rate really is, and the deposit needed to reach a goal.Open calculator →Capital Gains Tax CalculatorTaxesWork out capital gains tax for 2026: the 0%, 15% and 20% ladder, what a short-term gain costs instead, and the 3.8% net investment income tax.Open calculator →Roth vs Traditional CalculatorCompare a Roth and a traditional account after tax, find the break-even tax rate, and see what the same money does in a taxable brokerage account.Open calculator →