Roth IRA vs Traditional IRA Calculator

What makes Roth and Traditional IRAs different

The core difference comes down to timing. With a Traditional IRA, you put in money before taxes. That means your contribution might lower your taxable income right now. When you pull money out in retirement, you pay income tax on those withdrawals. It's like deferring your tax bill to later.

A Roth IRA flips the script. You contribute money that you've already paid taxes on. That money grows inside the account completely tax-free. When retirement comes and you take money out, you pay nothing in taxes. Zero. That's the appeal: a pile of after-tax money that's genuinely yours.

Which works better for you depends on one big assumption: will your tax rate in retirement be higher or lower than it is today? If you think you'll be in a lower tax bracket when you retire (maybe you'll have less income), Traditional tends to shine. If you think your bracket will be the same or higher, Roth often wins. This calculator helps you test both scenarios with your actual numbers.

How to use this tool

Start by entering your current age. Next, put in the amount you plan to contribute each year. Be realistic: if you can only max out a Roth some years, that's fine to model. The tool will apply that contribution every year until your retirement age.

Then comes the assumption about investment returns. This is what your money earns inside the account before you touch it. Historical stock returns average around 10 percent annually, though that varies a lot year to year. If you're more conservative or have a mix of stocks and bonds, you might use 6 or 7 percent instead. Use whatever feels right for your actual portfolio allocation plan.

Next, enter your current tax bracket. If you're not sure, think about what percentage of each dollar you earn goes to federal income tax. Someone making 70,000 dollars probably pays around 12 percent federal. Someone making 150,000 might pay 24 percent. Your marginal tax rate is the rate you pay on your last dollar earned. That's usually what matters most for a contribution decision.

Finally, enter what you expect your tax rate to be in retirement. This is a guess, but it's an informed one. If you have a pension coming, if you'll have big investment income, or if tax rates rise across the board, your future bracket might be higher. If you'll have less income in retirement, it'll likely be lower. This single assumption often determines which account comes out ahead in your model.

What the numbers show you

The calculator shows you the after-tax value of your money at retirement for both account types. That's the real number that matters: the cash you can actually spend. Not the account balance before taxes, but what's left after all taxes are paid.

If the Roth side shows a bigger number, it means paying taxes now and letting that money grow tax-free works better in your scenario. If the Traditional side wins, it means deferring taxes today and paying on distributions later comes out ahead. The difference might be hundreds or thousands of dollars, or it might be tiny. A tiny difference usually means either account is fine, so pick based on other factors like access to your money or flexibility.

Here's a real example: Sarah is 35 and plans to contribute 7,000 dollars a year. She expects a 7 percent annual return and is currently in the 22 percent tax bracket. She thinks she'll be in the 24 percent bracket in retirement because of other income. In this scenario, Roth often comes out ahead because her rate is going up. But if Sarah thought she'd drop to 12 percent in retirement, Traditional would look stronger.

Rules you need to know

The IRS sets limits on how much you can contribute to IRAs each year. In 2026, most people can contribute 7,000 dollars annually if they're under 50, and 8,000 if they're 50 or older. These limits change every year or two for inflation. This calculator doesn't enforce these limits, so you'll need to check current rules before you file.

Income limits exist for Roth IRAs. If your income is too high, the IRS phases out your eligibility to contribute. Traditional IRAs have a deduction phase-out if you're covered by a workplace retirement plan and earn above certain amounts. These thresholds shift yearly. The calculator assumes you qualify for both, so verify your specific situation before committing.

Withdrawals have different rules too. You can pull money out of a Traditional IRA anytime, but before age 59 and a half you typically pay a 10 percent penalty plus income tax. Roth gives you more flexibility: you can always withdraw your contributions (the money you put in) penalty-free, though earnings have restrictions until you reach 59 and a half and the account is five years old.

This calculator is a planning tool, not tax or legal advice. Use it to think through scenarios, but verify everything with current IRS rules before making your choice. Tax law changes, and phase-outs adjust yearly. A tax professional can help you sort through your specific situation.

Real scenarios to consider

Young people often benefit from Roth because they have decades for tax-free growth and are usually in lower tax brackets now. You're years away from retirement, so tax-free compounding is powerful.

High earners sometimes hit Roth income limits but can still use Traditional IRAs. A Traditional IRA let's them save retirement money with a tax deduction today, which can be valuable if they're in a high bracket now and expect to be in a similar or lower bracket later.

People with fluctuating income might use both. In low-income years, contribute to a Roth. In high-income years, max out a Traditional IRA to cut your taxable income. Over time, you build a mixed portfolio of tax-deferred and tax-free money, which gives you flexibility in retirement.

If you expect big required minimum distributions from a Traditional IRA, or if you plan to leave money to heirs, Roth can be advantageous. Your beneficiaries get tax-free withdrawals from a Roth, but they owe taxes on Traditional IRA withdrawals. That inheritance benefit alone might make Roth the choice.