Why compare Roth and Traditional on equal after-tax cost?

A $10,000 Roth contribution costs more take-home pay than a $10,000 Traditional contribution because the Traditional one is tax-deductible. Comparing equal contributions without accounting for that tax saving favors Roth unfairly. This calculator holds the take-home cost equal, or invests the tax saving when you choose equal contributions.

What are the 2026 401(k) and IRA limits?

For 2026 the IRS set the 401(k) employee limit at $24,500, the age-50 catch-up at $8,000, the ages-60-to-63 catch-up at $11,250, the IRA limit at $7,500 and the IRA age-50 catch-up at $1,100. Roth and Traditional contributions share each limit.

Can I get money out of a Roth IRA before 59½?

Your regular Roth IRA contributions can be withdrawn at any time without tax or penalty. Earnings generally need you to be 59½ and the account to be at least five years old, and each conversion has its own five-year clock for the 10% penalty.

Retirement · Roth vs. Traditional · 2026 IRS rules · Educational beta

Roth vs. Traditional: which retirement account is worth it?

Answer eight questions and get three answers: where this year’s retirement savings should go, how much tax you save today, and which choice leaves you more to spend in retirement. Every option is compared at the same after-tax cost.

Free to use
No account required
Transparent assumptions
Your calculations stay in your browser

Calculating…

Your suggested contribution strategy

Where this year’s savings go

Your plan until retirement

What to contribute, year by year

Tax savings today

What it does to this year’s taxes

Compare this year’s numbers for all four strategies

Access before 59½

Can you reach your money if you retire early?

Advanced analysisRoth vs. Traditional side by side, growth, break-even tax rate and what would flip the answer

Retirement income

How much each strategy lets you spend

Tax saved while working vs. tax paid on withdrawals

Retirement wealth comparison

Balance at retirement vs. what you can actually spend

Year by year

How the recommended mix grows and is spent

Break-even tax rate

The retirement tax rate where Roth and Traditional tie

How the break-even moves

Working out the sensitivity table…

What changes the recommendation?

When would a different account be better?

Advanced planningSave and compare up to three scenarios

Scenario comparison

Compare up to three scenarios

Set a custom allocation in Detailed Compare (or use the A/B/C presets), then save it. Saving stores that scenario’s inputs and results on this device only (browser local storage), never on a server. “Clear saved scenarios” deletes them.

LearnThe four account types, and what to think about at your age

The four accounts

Roth IRA, Traditional IRA, Roth 401(k), Traditional 401(k)

Planning by age

What to think about at your age

Age changes which rules apply and which questions matter. It does not decide the winning account on its own.

How we calculate

Same cost, fair fight. Every strategy uses the same take-home cost each year. A Traditional dollar costs less take-home pay because it is deductible, so a Traditional strategy puts more into accounts for the same sacrifice. If you choose “equal contribution amount” instead, each strategy puts in the same dollars and the Traditional tax saving is invested, spent or added to more contributions — your choice.

Per $1 of pre-tax earnings, held n years: Traditional after tax = G × (1 − t_future) Roth after tax = (1 − t_today) × G where G = (1 + r − fee)^n Break-even: t_future = 1 − (1 − t_today) × G_Roth / G_Trad (= t_today when fees match)

Taxes today use the 2026 federal brackets and standard deduction, plus your state rate. Savings are the exact difference in tax with and without the deduction — not a single marginal rate — so crossing a bracket is handled.

Taxes in retirement are modeled year by year in today’s dollars: Social Security taxation, the standard and age-65 deductions, the 2025–2028 senior deduction, required minimum distributions, state rules, and capital gains on taxable savings. Or enter flat future rates instead.

“What you can spend” is the highest steady after-tax income (in today’s dollars) that lasts to your planning age. It is the fairest single number for comparing strategies, because a big pre-tax balance is not the same as spendable money.

Precise vs. estimated: contribution limits, phase-outs, the match formula and current-year federal tax are exact for the numbers you enter. Future returns, tax law, state taxes, salary and spending are assumptions. Projections are not guarantees.

Read the full methodology, formulas and a worked example →

FAQ

Questions people ask

Is Roth or Traditional better?

Neither is always better. With identical investments and fees, Traditional wins when your tax rate on withdrawals is lower than the rate you save today, and Roth wins when it is higher. The employer match, income limits, fees, required minimum distributions and access to money before 59½ can tip a close call. That is why this tool shows a primary strategy, an alternative and the assumptions that would flip them.

Why not just compare $10,000 in a Roth with $10,000 in a Traditional account?

Because they do not cost the same. The Traditional $10,000 is deductible, so it costs less take-home pay. If you ignore that saving, Roth looks better than it is. We hold the take-home cost equal by default.

Should young people always use Roth?

Not automatically. Many young savers are in low brackets, which favors Roth, but a 25-year-old earning a high salary or planning a low-income retirement can come out ahead with Traditional. The calculator decides from your numbers, not your age.

What is MAGI and why does it matter?

Modified adjusted gross income decides whether you can contribute directly to a Roth IRA and whether a Traditional IRA contribution is deductible. For most employees it is roughly gross pay minus Traditional 401(k) contributions and other pre-tax deductions, plus other income. It is not the same as your household’s gross income. Enter it in Detailed Compare if you know it.

What about the employer match?

Collecting the full match almost always comes first. We calculate it from your plan’s formula (for example, 100% of the first 3% of pay plus 50% of the next 2%), apply your vesting assumption and never count it twice. Roth and Traditional contributions both earn the match.

Is a backdoor Roth IRA tax-free?

Only if you have no pre-tax IRA money. The IRS pro-rata rule looks at all your Traditional, rollover, SEP and SIMPLE IRA balances at year-end; that share of the conversion is taxable. We flag the taxable share and include its cost.

Can I use the money if I retire before 59½?

Some of it. Roth IRA contributions come out anytime. Conversions need five years to avoid the 10% penalty. Your current employer’s 401(k) may allow penalty-free withdrawals if you leave in or after the year you turn 55, if the plan permits. Rule 72(t) payments and taxable savings also help. The access check shows what is reachable under your plan.

Do you store my information?

No. Every calculation runs in your browser. Nothing is sent to a server. If you save a scenario, it is stored only in this browser’s local storage, and you can clear it anytime. If you copy a link with your inputs, the numbers travel inside the link itself (after the #, which browsers never send to a server), so share it only with people you trust.

I plan to retire abroad. Does this work for me?

Only partly. The model is US-only. Other countries may tax Roth withdrawals, and treaties differ, so after-tax retirement results are hidden when you choose a non-US retirement country.

Sources & tax year

Educational estimates only — not tax, legal or investment advice. Tax law, your income and markets will change. For decisions with big tax consequences (conversions, backdoor Roths, early withdrawals), confirm the details with your plan administrator or a tax professional.