How this calculator works
Both accounts grow the same dollars at the same assumed return — the comparison is purely about tax timing. Roth: contributions are after-tax, withdrawals are tax-free. Traditional: contributions are deductible, but withdrawals are taxed at your assumed retirement rate — and to keep the comparison fair, the tax you save on each traditional contribution is assumed to be invested in a parallel taxable-side account at the same return.
Example calculation
$625/month (the 2026 IRA limit ÷ 12) for 30 years at 7% grows to about $760,000 in either account. At a 24% rate now and 22% later, the traditional path nets roughly even with Roth — the decision then hinges on factors this tool can't see, like future tax law and your bracket in specific retirement years.
Common mistakes to avoid
- Assuming your retirement rate is automatically lower — RMDs and Social Security can push it up.
- Ignoring Roth income limits: direct contributions phase out at higher MAGI (2026 ranges shown in the results).
- Comparing this tool's question (which account for new contributions) with Roth conversions (moving existing traditional money) — different decisions, different tools.
Assumptions and limitations
Simplified single tax-rate comparison; no state tax, no pro-rata rule, no backdoor Roth mechanics, constant returns, and 2026 limits held flat. Income phase-outs are displayed but not enforced. This is an educational estimate, not tax advice.
Frequently asked questions
When is a Roth IRA better than a Traditional IRA?
The core rule: compare your marginal tax rate today with the rate you expect when withdrawing. Higher now than later → Traditional usually wins; lower now (early career, sabbatical, low-income year) → Roth usually wins. Roth also adds flexibility: no required minimum distributions, and qualified withdrawals don't inflate your taxable income — which matters for Social Security taxation and Medicare IRMAA.
What are the 2026 Roth IRA income limits?
For 2026, the ability to contribute directly to a Roth phases out between $153,000–$168,000 of MAGI for singles and $242,000–$252,000 for married filing jointly. Above the top of the range, direct contributions aren't allowed — though backdoor Roth (non-deductible traditional contribution, then conversion) remains available, with pro-rata rule caveats for those holding existing traditional IRA balances.
Should I max out my 401(k) or my IRA first?
General order that works for most people: capture the full employer match first (free money), then decide between IRA and 401(k) based on fees and options — IRAs often have broader, cheaper choices — then return to max the 401(k). The right Roth-vs-Traditional split at each step is the comparison this calculator makes.