Roth vs. Traditional IRA calculator
Both accounts get taxed exactly once — a Traditional IRA taxes the withdrawal, a Roth IRA taxes the contribution. Which one actually leaves you with more money depends entirely on whether your tax rate is higher today or in retirement. See the real after-tax value of each, side by side.
Traditional IRA: balance at retirement
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Traditional IRA: after-tax value
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Roth IRA: what you actually contribute/year
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Roth IRA: after-tax value (tax-free)
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Last updated: September 2026 · Verified by Hugo Cardozo.
Both accounts get taxed exactly once
A Traditional IRA contribution is deducted from taxable income now, grows tax-deferred, and gets taxed as ordinary income when withdrawn in retirement. A Roth IRA contribution is made with money that's already been taxed, but it grows completely tax-free and withdrawals in retirement owe nothing. Neither account avoids tax — they just tax you at a different point in time.
Why the comparison isn't just "same dollars, different bucket"
Contributing the same pre-tax dollar amount doesn't cost the same take-home pay in each account. Putting $7,000 in a Traditional IRA costs you $7,000 of pre-tax income (the deduction covers the tax). Putting the equivalent into a Roth costs you $7,000 of pre-tax income too, but since Roth contributions are after-tax, you first pay tax on that $7,000 at today's rate — leaving less actually invested. This calculator accounts for that difference so the comparison is apples-to-apples.
The one number that decides the winner
Mathematically, if your tax rate today equals your tax rate in retirement, Traditional and Roth produce the exact same after-tax result — the order of taxation doesn't matter when the rate doesn't change. Traditional wins when your rate in retirement is lower than it is today (common for many retirees whose income drops). Roth wins when your rate in retirement is higher than today (common for younger, lower-earning savers who expect their tax bracket to rise later).
Worked example
Contributing $7,000/year (pre-tax dollars) for 30 years at a 7% return, taxed at 24% today and an expected 15% in retirement: the Traditional IRA balance grows to about $661,226 pre-tax, or about $562,042 after paying 15% tax on withdrawal. The Roth IRA only receives about $5,320/year after paying 24% tax upfront, growing to about $502,531 tax-free. In this scenario, Traditional comes out about $59,510 ahead — because the tax rate today (24%) is higher than the expected rate in retirement (15%).
Why this isn't the only factor to weigh
Beyond the pure math, Roth IRAs have no required minimum distributions during the original owner's lifetime, can be more flexible for early withdrawals of contributions, and hedge against the risk of tax rates rising in the future — regardless of your personal bracket. Many people split contributions between both account types specifically to diversify this uncertainty rather than betting everything on one guess about future tax rates.
Frequently asked questions
Can I contribute to both a Roth and a Traditional IRA in the same year?
Yes, but the combined total across both accounts still can't exceed the annual IRA contribution limit for that tax year — you're splitting one limit between the two, not doubling it.
Do income limits affect who can contribute to a Roth IRA?
Yes — Roth IRA eligibility phases out above certain income thresholds that change periodically and depend on filing status, while Traditional IRA contributions are available regardless of income (though the tax deduction itself may phase out if you're also covered by a workplace retirement plan). Check the current IRS limits for your filing status before contributing.
What happens if my tax rate guess for retirement turns out wrong?
The math simply favors whichever account matches the rate that turns out to be correct — this is exactly why many savers hedge by contributing to both account types instead of predicting a single tax rate decades in advance with certainty.
📘 Related guide
Read the full guide: "Roth vs. Traditional IRA: The Tax Rate Question That Decides It".
Roth vs. Traditional IRA: The Tax Rate Question That Decides It