Roth vs Traditional Calculator
The contribution and the two tax rates
Your result will appear here
Fill in the fields on the left and this updates as you type.
Know what this estimate is based on
- Jurisdiction
- General mathematical model
- Scope and limitations
- Scenario model, not a forecast. Returns, volatility, inflation, fees, and taxes are assumptions and actual investment outcomes can be lower or negative.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter the annual contribution, the years until you retire and the return you expect.
- 02
Enter your marginal tax rate now and the rate you expect in retirement.
- 03
Decide how much of the traditional account's tax saving you would genuinely invest. It opens at 100%; set it to 0 to model spending it.
- 04
Read the after-tax value of each account side by side, and the retirement tax rate at which the two tie.
Formula
Roth = contribution grown at the return, kept in full. Traditional = the same balance × (1 − retirement rate), plus a side account funded each year by contribution × today's rate, grown at the return, with its gain taxed at the capital gains rate.
Example
$7,500 a year for 25 years at 6% grows to $411,484 either way. The Roth keeps all of it. The traditional pays 22% at withdrawal, leaving $320,958, and its yearly $1,800 deduction invested alongside becomes $98,756, of which $53,756 is gain taxed at 15% — $90,693 after tax. Traditional totals $411,650, ahead by $166. Spend the deduction instead and the Roth wins outright.
Definitions
- Marginal rate now
- The rate a traditional deduction saves you today — the rate on your last dollar of income.
- Retirement rate
- The rate you expect a withdrawal to be taxed at later. The whole comparison turns on it.
- Break-even rate
- The retirement rate at which the two accounts leave the same after-tax amount.
Good to know
One question, two tax rates
Roth against traditional is a bet on a single unknown: whether the rate you pay on this money will be higher today or in retirement. A traditional contribution is deducted now and taxed on the way out; a Roth is taxed now and never again. If the rates were identical, and if the deduction were invested rather than spent, the two would produce exactly the same after-tax result — the arithmetic is symmetric. Everything that makes one better than the other is an asymmetry: a different rate, a different treatment of the growth, or a different behavior on your part.
The deduction you never see
The most common way this comparison is rigged is silence about the tax saving. A traditional contribution hands back your marginal rate immediately — $1,800 on a $7,500 contribution in a 24% bracket. If that money is invested, the traditional side of the comparison has two accounts working, not one. If it is spent, it has one, and the Roth wins on nearly any assumption. Most calculators pick an answer and do not tell you which. This one asks, with a field that opens at 100% and can be set anywhere down to zero, because your honest answer about what you would do with $1,800 a year is a bigger input than any rate forecast.
Why the side account has to be taxed
Having added the deduction's side account, it must then be taxed correctly, or the rigging simply runs the other way. That account is an ordinary taxable brokerage account — the one account in the comparison that pays tax on its own growth. Compounding it at the full expected return with no tax at all would hand the traditional side an advantage no such account enjoys. Here its gain is taxed at the long-term capital gains rate at the horizon: on $7,500 a year for 25 years at 6%, the side account reaches $98,756 against $45,000 of deductions, and the $53,756 of gain costs $8,063 at 15%. That $8,063 is roughly the size of the whole gap between the two strategies, which is how much the detail matters.
Do not assume a lower rate in retirement
The standard advice — traditional if your rate will fall, Roth if it will rise — is sound, but the premise is weaker than it sounds. Retirement income is rarely small: Social Security, a pension, investment income and required minimum distributions from pre-tax accounts stack up, and RMDs grow with the balance, so a large traditional account can force a higher bracket in your seventies than the one you deferred at. Tax rates themselves are legislated, not forecast. That is why the break-even rate is the useful output here: rather than predicting the future, it tells you the retirement rate at which the two tie, so you only need an opinion about which side of that number you land on — and splitting contributions between both is a reasonable hedge when it is close.
Frequently asked questions
Why is there a field for what I do with the tax saving?
Because it decides the answer. A traditional contribution hands you a deduction now; if that money is invested the traditional side gains a second account, and if it is spent the Roth wins on almost any assumption. Most calculators pick one silently. This one asks, because the assumption is the comparison.
Why is the side account taxed?
Because it is a taxable brokerage account — the one account in this comparison that pays tax on its own growth. Compounding it tax-free would rig the comparison toward traditional as surely as ignoring it rigs it toward Roth. Its gain is taxed at the long-term capital gains rate at the horizon.
What does the break-even retirement rate mean?
It is the retirement tax rate at which both accounts leave you the same after-tax amount. If you expect a lower rate than that in retirement, traditional wins; higher, and Roth wins. It turns a guess about future tax law into one number you can hold an opinion about.
Should I really expect a lower rate in retirement?
Not automatically. Retirement income can include Social Security, required minimum distributions from pre-tax accounts, a pension and investment income, and RMDs in particular grow with the balance. A large traditional balance can push you into a higher bracket than the one you deferred at.
Can I do both?
Yes, and many plans allow a split between pre-tax and Roth deferrals. Splitting hedges the rate you cannot predict, which is worth something on its own when the two sides come out as close as they often do.