Roth vs Traditional IRA Calculator
Compare after-tax wealth between Roth and Traditional IRA strategies
Roth vs Traditional IRA: The Math
After-tax contrib → FV → No tax
Final = Contribution × FV_factor
Pre-tax contrib → FV → Tax at withdrawal
After-tax = Contribution × FV_factor × (1 − t_retirement)
They break even when your retirement tax rate equals your current rate. Any higher retirement rate favors Roth; any lower rate favors Traditional.
Guide
How it works
Both Roth and Traditional IRAs let your investments grow inside a tax-advantaged account — the key difference is when you pay taxes. With a Traditional IRA, contributions may be tax-deductible now, reducing your taxable income today, but withdrawals in retirement are taxed as ordinary income. With a Roth IRA, you contribute after-tax dollars and owe nothing on qualified withdrawals — including all the growth.
The winning strategy depends entirely on your tax rates. If you're in a low bracket now and expect to be in a higher one in retirement (common early in a career), Roth wins. If you're at your peak earning years and expect lower income in retirement, Traditional is usually better.
Note: This calculator uses end-of-year contributions and assumes the same nominal contribution for both accounts. In practice, a Traditional IRA lets you invest more (the tax savings), but the comparison shown is on equal nominal contributions.
What is the 2025 IRA contribution limit?expand_more
For 2025, you can contribute up to $7,000 per year to a Roth or Traditional IRA (or a combination). If you are 50 or older, the limit rises to $8,000 with the catch-up contribution.
Can I contribute to both a Roth and Traditional IRA?expand_more
Yes, but the combined total across all your IRAs cannot exceed the annual limit ($7,000 or $8,000 if 50+). You can split contributions between them in any proportion.
Are there income limits for Roth IRA contributions?expand_more
Yes. For 2025, Roth IRA contributions phase out at $150,000–$165,000 for single filers and $236,000–$246,000 for married filing jointly. Traditional IRA deductibility has separate income limits if you have a workplace plan.
When does the Roth IRA beat Traditional?expand_more
Roth wins when your retirement tax rate is higher than your current rate, when you want to leave tax-free money to heirs, or when you need flexibility (Roth contributions can be withdrawn penalty-free at any time).
What is a backdoor Roth IRA?expand_more
If your income exceeds the Roth IRA limit, you can contribute to a non-deductible Traditional IRA and then convert it to a Roth. This strategy lets high earners access Roth benefits. Consult a tax advisor for your situation.
Next steps