Roth vs Traditional IRA Calculator — Find the Better Tax Strategy
Compare Roth vs Traditional IRA after-tax value. Enter your tax rates, contributions, and years to see which IRA saves you more in taxes over your retirement horizon.
Roth vs Traditional IRA Formula
The key difference is WHEN you pay taxes: Traditional IRA contributions reduce taxable income now but withdrawals are fully taxed in retirement. Roth IRA contributions use after-tax dollars but grow and withdraw tax-free.
If your tax rate in retirement is HIGHER than today, Roth wins. If it is LOWER, Traditional wins. If rates are identical, both produce the same after-tax result (ignoring RMDs and Roth conversion strategies).
How to Use the Roth vs Traditional IRA Calculator
Enter your annual contribution
2025 IRA contribution limit is $7,000 ($8,000 if age 50+). Enter up to your full allowable amount.
Set your current tax rate
Use your effective federal tax rate or marginal rate. Common brackets: 22% for middle-income earners, 12% for lower income.
Estimate retirement tax rate
Consider: will Social Security be taxed? Will you have other income? Most retirees land in the 12–22% bracket.
Enter expected return rate
A diversified retirement portfolio typically returns 6–8% annually. Use 7% as a balanced estimate.
See which IRA wins
The calculator shows both accounts' after-tax values and names the better option based on your tax situation.
Real-World Scenario Example
"A 35-year-old contributes $7,000/year for 30 years. Current tax rate: 22%. Expected retirement tax rate: 15%. Expected return: 7%."
Inputs
Result
Traditional IRA after-tax: ~$566,250. Roth IRA after-tax: ~$520,130. Traditional wins by ~$46,120 because tax rate drops in retirement.
Important Disclaimer
This calculator provides educational estimates only. IRA rules, contribution limits, and tax rates change yearly. Consult a tax professional or financial advisor for personalized guidance.
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