When does Traditional win?

When your retirement marginal rate is meaningfully BELOW your current rate. Traditional is the standard for peak-earning years where you'll drop to a lower bracket in retirement (typical: 32% bracket today, 22% bracket at withdrawal).

What if my retirement tax rate equals my current rate?

They're mathematically identical (with the "invest tax savings" toggle ON). The choice reduces to non-financial factors: RMDs (Roth has none — better for estate planning); income-limit restrictions; state-tax-state migration plans; certainty about future legislation.

Are 2026 contribution limits accurate?

Per IRS Rev. Proc. 2025-32 §3.05: $7,500 IRA basic + $1,000 catch-up at 50+ = $8,500 over 50. Roth income phase-outs: $150k-$165k single / $236k-$246k MFJ. These are the official 2026 published values.

IRS Publication 590-A (Contributions to IRAs); Rev. Proc. 2025-32 §3.05 (2026 limits); Fidelity / Vanguard / Schwab Roth-vs-Trad comparison guides; CFP Board Code of Ethics §3.A guidance on tax-deferred vs tax-free vehicle selection.

When does Traditional win?

When your retirement marginal rate is meaningfully BELOW your current rate. Traditional is the standard for peak-earning years where you'll drop to a lower bracket in retirement (typical: 32% bracket today, 22% bracket at withdrawal).

What if my retirement tax rate equals my current rate?

They're mathematically identical (with the "invest tax savings" toggle ON). The choice reduces to non-financial factors: RMDs (Roth has none — better for estate planning); income-limit restrictions; state-tax-state migration plans; certainty about future legislation.

Are 2026 contribution limits accurate?

Per IRS Rev. Proc. 2025-32 §3.05: $7,500 IRA basic + $1,000 catch-up at 50+ = $8,500 over 50. Roth income phase-outs: $150k-$165k single / $236k-$246k MFJ. These are the official 2026 published values.

IRS Publication 590-A (Contributions to IRAs); Rev. Proc. 2025-32 §3.05 (2026 limits); Fidelity / Vanguard / Schwab Roth-vs-Trad comparison guides; CFP Board Code of Ethics §3.A guidance on tax-deferred vs tax-free vehicle selection.

Roth vs Traditional IRA Calculator

Compare after-tax retirement balance for Roth (after-tax in, tax-free out) vs Traditional IRA (pre-tax in, taxable out).

Inputs

Annual contribution ($)

2026 limit: $7,500 under 50 / $8,500 over 50 (Rev. Proc. 2025-32 §3.05).

Years until withdrawal

Expected annual return (%)

Current marginal tax rate (%)

Federal + state combined marginal rate today.

Retirement marginal tax rate (%)

Combined marginal rate when you withdraw. Usually lower (no salary, lower bracket).

Invest current-year Roth tax savings in a taxable account?

YES is the financially correct comparison: the dollar amount you can't contribute to Roth (because of taxes) instead goes into a taxable brokerage at the same return.

Long-term capital-gains rate on taxable side (%)

Federal LTCG rate at retirement. 0/15/20% by bracket; most households pay 15%.

Result

After-tax balance at withdrawal

Roth $707,511 · Trad $703,751

Roth wins by $3,760 — your retirement rate is at or above your current rate.

Annual contribution$7,000
Years compounding30
Expected return7.00%
Current marginal tax24.0%
Retirement marginal tax22.0%
Total contributed (over period)$210,000
Pre-tax FV in either account$707,511
— Traditional IRA path —
FV pre-tax$707,511
After-tax at retirement$551,859
Annual upfront tax saving$1,680 (invested in taxable brokerage at same return)
Taxable brokerage FV (after LTCG)$151,892
Traditional + taxable side after-tax total$703,751
— Roth IRA path —
FV (= after-tax — tax-free withdrawal)$707,511
— Verdict —
Roth − Traditional (after-tax)Positive = Roth wins.$3,760
VerdictRoth wins by $3,760 — your retirement rate is at or above your current rate.

Step-by-step

Annuity-due FV: C · ((1+r)^N − 1)/r · (1+r) = $707,511.
Traditional pre-tax FV = $707,511; after 22.0% tax = $551,859.
Roth has same FV and is tax-free → $707,511.
Apples-to-apples: invest the upfront-tax saving ($1,680/yr) at same return in a taxable account → $151,892 after LTCG at 15%.
Verdict: Roth wins by $3,760 — your retirement rate is at or above your current rate.

How to use this calculator

Enter your planned annual contribution (the 2026 limit is $7,500 / $8,500 over 50).
Enter years until withdrawal — usually retirement age minus current age.
Set current marginal tax rate (federal + state, your top bracket today).
Set retirement marginal tax rate — usually 2-5 pp lower than today's rate because retirement income is typically lower than peak earning years.
Leave "invest tax savings" set to YES for the apples-to-apples comparison.

About this calculator

Roth and Traditional IRAs are mathematically equivalent if your tax rate is the same now and at retirement. They diverge when those rates differ: lower tax rate now favours Roth (pay tax cheaply now, withdraw free later); lower tax rate at retirement favours Traditional (defer tax to a cheaper bracket). The honest comparison invests the Traditional's up-front tax savings in a taxable brokerage at the same return — otherwise Roth looks artificially worse just because it costs more out-of-pocket per year. The IRS contribution limit ($7,500 under 50 / $8,500 over 50 for 2026) is identical for both, and that limit is in after-tax dollars for Roth but pre-tax for Traditional, which is the mathematical core of the comparison. Real-world considerations not modeled here: required minimum distributions (RMDs) apply to Traditional but NOT to Roth (a meaningful advantage for estate planning); income limits restrict direct Roth contributions above ~$165k single / $246k MFJ in 2026 (the backdoor-Roth conversion is the workaround); state taxes on the Traditional withdrawal vary widely.

Frequently asked

When your retirement marginal rate is AT OR ABOVE your current rate. Roth converts the uncertainty of "future taxes will be higher" into a known-cost-today decision. Young high-savers, military, and anyone with substantial inheritance / Roth conversion ladder strategies favor Roth.