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Savings Calculators

Roth vs Traditional IRA Calculator

Compare Roth and Traditional IRA after-tax value at retirement based on your tax rate today vs in retirement.

Compares equal-cash contributions with the traditional IRA's tax deduction reinvested in a taxable side account.

$
yr
%
%
%
Traditional wins by
$13,225
Based on your tax rates today (24%) and in retirement (22%).
Gross future value
$661,226
Roth net (after tax)
$661,226
Traditional net + reinvested tax savings
$674,450
Difference (Roth − Traditional)
-$13,225
Overview

How the Roth vs Traditional IRA Calculator Works

The Roth vs Traditional choice comes down to one question: is your tax rate higher today or in retirement? This calculator projects the after-tax value of both accounts using the same annual contribution and return, then adjusts the traditional side to account for the tax deduction you can reinvest along the way.

Formula

The Math Behind the Calculator

Future Value = PMT × ((1+r)^n − 1) / r. Roth net = FV (withdrawals tax-free). Traditional net = FV × (1 − retirement tax rate) + FV of reinvested annual tax savings.

Example

A Worked Example

Contributing $7,000/year for 30 years at 7%: FV ≈ $661,000. If your current tax rate is 24% and retirement rate is 22%, Roth leaves ~$661,000 and Traditional (with reinvested savings) leaves ~$674,000 — a slight traditional edge because your future rate is lower.

How to use

How to Use the Roth vs Traditional IRA Calculator

  1. 1Enter the annual contribution you plan to make.
  2. 2Set expected years to retirement and long-run annual return (7% is a common assumption).
  3. 3Enter your current marginal tax rate and estimated retirement tax rate.
  4. 4Read the winner card — the difference is what you'd have to spend in retirement.
Interpretation

What the Results Mean

  • Roth wins when your retirement tax rate is higher than today's.
  • Traditional wins when your current tax rate is higher and you can reinvest the tax savings.
  • A small difference means the choice is close — pick the one that fits your other planning goals.
Avoid

Common Mistakes to Avoid

  • Assuming your retirement tax rate will be lower without actually estimating it.
  • Choosing Traditional without ever reinvesting the tax deduction — the math flips if you spend it.
  • Ignoring required minimum distributions (RMDs) on Traditional IRAs starting at age 73.
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FAQ

Frequently Asked Questions

Which is usually better?+

Roth if you expect the same or higher tax rate in retirement, or if you want tax-free withdrawals and no RMDs. Traditional if your current rate is meaningfully higher and you'll reinvest the deduction.

Can I do both?+

Yes — many savers split contributions to hedge tax-rate uncertainty. IRS limits apply to combined contributions.

Does this include employer matching?+

No — that's a 401(k) concept. See the 401(k) match calculator for that.

Financial Disclaimer

This calculator is for educational and estimation purposes only. It does not provide financial, mortgage, tax, investment, or legal advice. Actual rates, payments, taxes, fees, insurance costs, eligibility, and loan terms vary by lender, location, credit profile, and market conditions. Always compare official offers and consult a qualified professional before making financial decisions.

Last updated June 2026 · Prepared by the mCalculator Editorial Team