Roth vs Traditional IRA Calculator
Compare the after-tax retirement value of a Roth IRA versus a Traditional IRA.
Formula
About this calculator
A Roth and a Traditional IRA hold the same investments and grow at the same rate — the only real difference is when the IRS takes its cut. With a Traditional IRA you contribute pre-tax dollars and get a deduction now, but every dollar you withdraw in retirement is taxed as ordinary income. With a Roth IRA you contribute post-tax dollars and get no deduction now, but qualified withdrawals in retirement are completely tax-free. This calculator projects both accounts side by side and shows the after-tax amount you actually get to spend.
Because both accounts receive the same contribution and earn the same return, they reach the same gross balance at retirement. The decision comes down to one comparison: your tax rate today versus your tax rate in retirement. If your rate will be lower in retirement, the Traditional deduction taken at today's higher rate can win. If your rate will be the same or higher later — common for young, lower-earning savers who expect income to rise — the Roth's tax-free withdrawals usually come out ahead.
Example: contributing $7,000 a year from age 30 to 65 at a 7% return grows to a gross balance of about $967,700. With a Roth, that entire ~$967,700 is yours tax-free. With a Traditional taxed at 15% in retirement, you keep about $822,500 — so the Roth wins by roughly $145,000. The Traditional IRA does, however, defer about $58,800 in income tax up front (at a 24% rate over 35 years); investing those savings separately narrows the gap, which is why the two accounts tie when your tax rate never changes.
Frequently asked questions
Is a Roth or Traditional IRA better?
It depends on your tax rate now versus in retirement. If you expect a lower rate in retirement, a Traditional IRA's upfront deduction can win; if you expect the same or a higher rate, the Roth's tax-free withdrawals usually come out ahead. When the two rates are equal, the accounts are mathematically identical.
Why do both accounts show the same gross balance?
Because they receive the same contribution and earn the same return, the pre-tax balance at retirement is identical. The difference is purely how much tax you pay — none on a Roth withdrawal, and your retirement rate on a Traditional one.
What is the upfront tax saved with a Traditional IRA?
Traditional contributions are deductible, so each year you defer income tax equal to your contribution times your current marginal rate. This calculator totals that deferred tax; if you invest it separately it forms a side pot that offsets the tax you'll owe on withdrawals.
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⚠️ This is a simplified planning estimate assuming constant contributions, returns and tax rates, and does not model contribution limits, income phase-outs, RMDs or state taxes. It is not investment or tax advice.