Retirement Calculator
Roth vs Traditional IRA Calculator
Compare the projected after-tax value of Roth and Traditional IRA contributions under your current and retirement tax assumptions.
Use the Roth vs Traditional IRA Calculator
Your results
- Roth IRA ending value
- $0.00
- Traditional IRA after-tax ending value
- $0.00
- Difference
- $0.00
- Better option under assumptions
- Not calculated
How this calculator works
- What it does
- Compare the projected after-tax value of Roth and Traditional IRA contributions under your current and retirement tax assumptions.
- Inputs used
- The estimate uses annual contribution, current tax rate (%), retirement tax rate (%), expected annual return (%), and number of years.
- Calculation approach
- The calculator applies the relationships defined for the roth vs traditional ira calculator to those inputs and updates roth ira ending value, traditional ira after-tax ending value, difference, and better option under assumptions.
- How to read the result
- Treat the result as a scenario based on the values entered. Compare a few reasonable inputs and consider costs, taxes, timing, or risks that the calculator does not include.
How to Use This Calculator
- Enter Annual contribution and Current tax rate (%) using values that match the scenario you want to evaluate.
- Enter Retirement tax rate (%) and Expected annual return (%) using values that match the scenario you want to evaluate.
- Enter Number of years using values that match the scenario you want to evaluate.
- Review the assumptions for the roth vs traditional ira calculator, especially rates, time periods, and optional amounts.
- Select Calculate to update the results, then adjust one input at a time to compare scenarios.
Understanding the Results
- Roth IRA ending value
- The roth ira ending value estimated by the Roth vs Traditional IRA Calculator using annual contribution, current tax rate (%), and retirement tax rate (%) and the other values entered.
- Traditional IRA after-tax ending value
- The traditional ira after-tax ending value estimated by the Roth vs Traditional IRA Calculator using annual contribution, current tax rate (%), and retirement tax rate (%) and the other values entered.
- Difference
- The difference between the current position and the calculated target or comparison value.
- Better option under assumptions
- A plain-language comparison based only on the assumptions entered; it is not a guarantee or personal recommendation.
Common Mistakes
- Ignoring contribution limits, eligibility rules, taxes, penalties, or account-specific restrictions.
- Comparing pre-tax and after-tax balances as though they were directly equivalent.
- Assuming current tax rates and laws will remain unchanged.
- Treating the calculator result as individualized tax advice.
Worked Example
Example inputs
- Annual contribution
- $7,000
- Current tax rate (%)
- 24%
- Retirement tax rate (%)
- 22%
- Expected annual return (%)
- 7%
- Number of years
- 30
Example results
- Roth IRA ending value
- $502,531.38
- Traditional IRA after-tax ending value
- $515,755.89
- Difference
- -$13,224.51
- Better option under assumptions
- Traditional IRA
Under these example assumptions, the better option under assumptions is Traditional IRA. This comparison illustrates the entered scenario and is not a guarantee that the same option will be better in practice.
Frequently asked questions
What is the main difference between Roth and Traditional IRAs?
Roth contributions are made with after-tax dollars and qualified withdrawals are generally tax-free. Traditional contributions may provide a current tax benefit, while withdrawals are generally taxable.
Why does the calculator reduce the Roth contribution by my current tax rate?
It compares accounts using the same pre-tax contribution budget. The Roth amount is reduced for taxes paid today, while the full amount goes into the Traditional IRA before retirement taxes.
When might a Roth IRA have the higher projected value?
Under these assumptions, Roth tends to compare more favorably when your retirement tax rate is higher than your current tax rate.
When might a Traditional IRA have the higher projected value?
Traditional tends to compare more favorably when your retirement tax rate is lower than your current tax rate, assuming the current tax savings are reflected in the comparison.
Does this calculator include IRA limits and eligibility rules?
No. Contribution limits, income restrictions, deductions, employer plans, required distributions, and tax laws can affect the choice. This calculator is an educational projection, not tax advice.
What does the Roth vs Traditional IRA Calculator calculate?
Compare the projected after-tax value of Roth and Traditional IRA contributions under your current and retirement tax assumptions. The result is based only on the inputs and assumptions shown on the page.
How should I interpret the better option under assumptions from the Roth vs Traditional IRA Calculator?
Use it as an estimate for the scenario entered, not as a guarantee or personal recommendation. Test changes to annual contribution, current tax rate (%), and retirement tax rate (%) to see which assumptions have the greatest effect.