Roth vs. Traditional Calculator
Compare Roth and traditional retirement accounts using your tax rates, contributions, and investment growth assumptions to see which may leave you with more after‑tax money.
Contribution & growth
Tax assumptions
Options
Roth vs. traditional formulas
1. Contribution basis
Same dollar contribution:
Roth contribution = Annual contribution (after‑tax)
Traditional contribution = Annual contribution (pre‑tax)
Same tax cost today:
Tax cost today (Roth) = Annual contribution × Current tax rate
Tax cost today (Traditional) = Annual contribution × Current tax rate on any taxable portion
This calculator simplifies by:
- Treating Roth contributions as after‑tax
- Treating traditional contributions as pre‑tax
2. Growth with fees
Net growth rate = Growth rate − Fee rate
Each year:
Balance_next = (Balance_current + Contribution) × (1 + Net growth rate)
3. After‑tax withdrawals
Roth:
First‑year withdrawal (after tax) = Balance × Withdrawal % (assuming qualified tax‑free)
Traditional:
First‑year withdrawal (after tax) = Balance × Withdrawal % × (1 − Retirement tax rate)
The calculator applies these formulas to both account types and compares after‑tax withdrawal power at retirement.
How to interpret this Roth vs. traditional comparison
The Roth vs. traditional decision is really a bet on your tax rates now versus later. This tool gives you a structured way to explore that trade‑off.
When Roth may shine
- If you expect higher tax rates in retirement than today.
- If you value tax‑free withdrawals and fewer required minimum distributions (RMDs) rules.
- If you’re early in your career with relatively low income.
When traditional may shine
- If you’re in a high tax bracket now and expect lower rates later.
- If you want the immediate tax deduction to free up cash flow.
- If you plan to manage withdrawals carefully in retirement to stay in lower brackets.
Worked example
Suppose you contribute $6,000 per year for 30 years, earn 7% with 0.5% fees, your current tax rate is 22%, and you expect 15% in retirement:
- Roth: You pay tax now, contributions grow tax‑free, and withdrawals are assumed tax‑free.
- Traditional: You get a deduction now, contributions grow pre‑tax, and withdrawals are taxed at 15%.
- The calculator shows which path yields more after‑tax withdrawal power in year one of retirement.
Use this as a directional guide. Real‑world planning should consider brackets, other income sources, and changing tax laws.
Frequently Asked Questions
Does this model tax brackets or credits?
No. It uses single marginal tax rates for simplicity. Real tax situations are more complex.
What about required minimum distributions (RMDs)?
RMD rules differ between Roth and traditional accounts. This calculator focuses on first‑year withdrawal power, not RMD schedules.
Can I export the comparison?
Yes. Use Export CSV to download year‑by‑year balances for both account types.
Is this tax or investment advice?
No. It’s an educational tool. Talk with a tax or financial professional for personalized advice.
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Information on this site is for educational purposes only and is not financial, tax, or legal advice. Calculations are estimates and may not reflect actual results. See our Privacy Policy and Disclaimer.