Roth vs Traditional IRA Calculator

Use this calculator to compare the after-tax retirement value of Roth IRA and Traditional IRA contributions.

What this calculator does

The Roth vs Traditional IRA calculator compares two tax treatments for retirement saving. It estimates which account may leave more after-tax value under your tax assumptions.

It uses:

• current age and retirement age
• annual contribution
• expected annual return
• current and retirement tax rates

Roth vs Traditional IRA Formula

Traditional After-Tax Value = Pre-Tax FV × (1 - Retirement Tax Rate)

Where:

• Roth Value = tax-free future value
• Traditional Value = future value after retirement tax
• Current Tax Rate = tax cost of Roth contributions
• Retirement Tax Rate = tax cost of Traditional withdrawals

Example calculation

If:

• Annual contribution = 7,000
• Current tax rate = 24%
• Retirement tax rate = 22%
• Time to retirement = 30 years

Then:

• Roth grows tax-free
• Traditional grows pre-tax
• Traditional is reduced by retirement tax
• The higher after-tax value wins

The better option depends mainly on current vs future tax rates.

What is Roth vs Traditional IRA?

Roth vs Traditional IRA is the choice between paying tax now or later. Roth contributions use after-tax dollars, while Traditional IRA withdrawals are generally taxable.

Why Roth vs Traditional matters

• affects after-tax retirement income
• helps manage lifetime tax cost
• supports account diversification
• improves contribution decisions

When to use this calculator

• choosing between IRA types
• comparing tax-rate assumptions
• planning long-term retirement savings
• evaluating Roth conversion logic

Common mistakes

• comparing balances before tax
• ignoring current tax cost
• assuming future tax rates are certain
• overlooking eligibility limits

Roth IRA vs Traditional IRA

Roth IRA favors paying tax now. Traditional IRA favors deferring tax until withdrawal.

If retirement tax rates are higher, Roth often looks better. If lower, Traditional may look better.

FAQs

What is Roth vs Traditional IRA?

It is the comparison between after-tax Roth saving and tax-deferred Traditional IRA saving.

How do you calculate Roth vs Traditional IRA?

Project both balances, then reduce Traditional value by expected retirement tax.

What is a good IRA choice?

A good choice depends on whether your tax rate is likely higher now or in retirement.

What is the difference between Roth and Traditional IRA?

Roth pays tax upfront. Traditional usually pays tax on withdrawal.