Roth vs Traditional IRA Calculator
See which IRA leaves you more after taxes — it all comes down to your tax rate now versus in retirement.
Compare a Roth and a Traditional IRA on an equal out-of-pocket basis, with after-tax retirement value for each.
Roth vs Traditional: it's a bet on your tax rate
Both IRAs give you tax-free growth — the difference is when you pay the tax. With a Roth, you contribute money you've already been taxed on, and every dollar you withdraw in retirement is tax-free. With a Traditional, you get a tax deduction now, your money grows untouched, and you pay ordinary income tax when you withdraw.
That makes the whole decision a single question: will your tax rate be higher or lower in retirement than it is today? If you expect higher taxes later, the Roth wins — you lock in today's lower rate. If you expect lower taxes later, the Traditional wins. If the rates are the same, the two are mathematically identical. This calculator compares them on an equal out-of-pocket basis — the same money out of your pocket today — so the comparison is apples to apples. Once you've picked, see how the balance itself grows with the Compound Interest Calculator and check you're on track with the Retirement Calculator.
The honest comparison holds your out-of-pocket cost equal. A Roth contribution of C is made with after-tax dollars and is never taxed again, so its after-tax retirement value is just its grown value. The same out-of-pocket C buys a larger Traditional contribution — C ÷ (1 − tnow) — because the deduction refunds tax at your current rate; that larger sum grows and is then taxed at your retirement rate.
Everything cancels except the ratio (1 − tret) ÷ (1 − tnow). If your retirement rate is lower than today's, that ratio exceeds 1 and Traditional wins; if it's higher, Roth wins; if equal, it's a wash. This is why income, return, and time horizon don't change which account wins — only how large the gap is. Caveats the math leaves out: contribution limits ($7,000 / $8,000 for 2026) can cap the larger equivalent Traditional contribution, Roth has no required minimum distributions, and tax-bracket and income-limit rules add real-world nuance. Pressure-test your retirement tax rate against your projected balance with the Retirement Calculator.
Roth vs Traditional IRA: common questions
Roth or Traditional IRA — which is better?
On an equal out-of-pocket basis, the choice comes down to one thing: your tax rate now versus in retirement. A Roth wins if your tax rate will be higher in retirement than it is today (you pay tax now at the lower rate). A Traditional IRA wins if your rate will be lower in retirement. If the rates are equal, the two are mathematically identical. Most young or lower-income savers expect higher future rates and lean Roth; high earners in their peak years often favor Traditional.
What is the 2026 IRA contribution limit?
For 2026 you can contribute up to $7,000 to IRAs if you're under 50, or $8,000 if you're 50 or older (a $1,000 catch-up). That limit is the combined total across all your Roth and Traditional IRAs, not per account. Roth contributions also phase out at higher incomes, while Traditional IRA deductibility can phase out if you (or a spouse) are covered by a workplace plan.
Are Roth IRA withdrawals really tax-free?
Yes, qualified Roth withdrawals are completely tax-free — both your contributions and all the investment growth. To be qualified, the account must be at least five years old and you must be 59½ or older. Because you already paid tax on the money going in, the IRS takes nothing on the way out, and Roth IRAs have no required minimum distributions during your lifetime.
What is a Roth conversion or backdoor Roth?
A Roth conversion moves money from a Traditional IRA into a Roth IRA; you pay ordinary income tax on the converted amount now so it can grow tax-free afterward. A "backdoor Roth" is the same idea used by high earners who exceed the Roth income limit: contribute to a (non-deductible) Traditional IRA, then convert it to Roth. Conversions make the most sense in lower-income years, before tax rates rise, or before required minimum distributions begin.
Can I contribute to both a Roth and a Traditional IRA?
Yes, but your combined contributions across both cannot exceed the annual limit ($7,000, or $8,000 if 50+, for 2026). Splitting contributions is one way to hedge your tax bet — some tax-free income and some tax-deferred income in retirement gives you flexibility to manage your bracket year to year.
Is there an income limit to contribute to a Roth IRA?
Yes. Roth IRA contributions phase out at higher modified adjusted gross incomes, and above the top of the range you can't contribute directly at all. High earners often use a backdoor Roth instead. Traditional IRA contributions have no income limit, though the upfront deduction can be reduced or eliminated if you're covered by a workplace retirement plan.