Formulas and 2026 figures checked & updated: July 2026
2026 limit: $7,000 ($8,000 if 50+)
Your marginal tax rate today.
Your expected marginal tax rate when withdrawing.
How to Use the Roth vs Traditional IRA Calculator
- Enter your planned annual contribution.
- Enter your current savings balance in the account.
- Enter your current age and the age you plan to retire.
- Set your current tax rate — the rate applied to a Traditional deduction today.
- Set your expected tax rate in retirement — the key driver of which account wins.
- Enter your expected annual investment return.
- Example: contributing $7,000/year from age 30 to 65 at a 22% tax rate now and 15% in retirement usually favors Traditional, since your rate is expected to drop.
What This Calculator Does
The Roth vs Traditional IRA Calculator projects both account types forward to retirement using the same contribution and return assumptions, then applies the appropriate taxes to find the after-tax value you'd actually get to spend.
The comparison relies on six inputs: your annual contribution, current savings balance, current age, planned retirement age, expected annual return, and — most importantly — your marginal tax rate now versus your expected marginal tax rate in retirement. For 2026, the IRA contribution limit is $7,000 per year ($8,000 if you're 50 or older), shared across all your Traditional and Roth IRAs combined. As a general benchmark, many retirees end up in a similar or somewhat lower tax bracket than during their peak working years, which is part of why Traditional often has an edge for high earners — but the calculator's outcome flips easily if you expect a higher future tax rate or want to hedge against future tax-law changes.
This calculator is most useful when opening a new IRA, deciding how to split contributions between Roth and Traditional, or evaluating a career change that shifts your income up or down. Because a Traditional IRA contribution is tax-deductible, it frees up cash today; the calculator assumes that freed-up cash is invested in a separate taxable account so both paths start from the same out-of-pocket cost, for an apples-to-apples comparison of what actually lands in your pocket at retirement.
Formula
Roth Value = FV(contributions) · Traditional Value = FV(contributions) × (1 − retirement tax rate) + FV(tax savings invested)Both balances grow using the standard future-value-of-annuity formula. The Roth balance is untaxed at withdrawal. The Traditional balance is taxed at your assumed retirement rate, then combined with a side account that grew from investing the upfront tax deduction.
- Tax NowYour current marginal tax rate, applied to the up-front deduction
- Tax LaterYour expected marginal tax rate in retirement, applied to Traditional withdrawals
Examples
Example 1: Tax rate drops in retirement
$7,000/year, age 30 to 65, 22% tax rate now vs. 15% in retirement, 7% return.
Traditional usually wins here — you get the deduction at your higher current rate and pay tax later at a lower rate.
Example 2: Tax rate rises in retirement
Same contribution and timeline, but 15% tax rate now vs. 24% in retirement.
Roth usually wins — paying tax now at your lower rate beats paying more later on a larger balance.
Example 3: Same tax rate now and later
$7,000/year from age 25 to 65 (40 years), 22% tax rate both now and in retirement, 7% return.
Roth and Traditional produce virtually the same after-tax value — roughly $1.4M in this scenario — since with equal tax rates the two are mathematically equivalent; the tie-breaker often comes down to non-tax factors like Roth's lack of RMDs.
Key Terms Explained
- Roth IRA
- A retirement account funded with after-tax dollars. Contributions and earnings grow tax-free, and qualified withdrawals in retirement owe no tax.
- Traditional IRA
- A retirement account funded with pre-tax (or deductible) dollars. Contributions may lower your taxable income today, but withdrawals in retirement are taxed as ordinary income.
- Compound Interest
- Interest earned on both your original balance and previously earned interest, so growth accelerates the longer money stays invested.
- Marginal Tax Rate
- The tax rate applied to your last dollar of income — your top tax bracket. It's higher than your effective (average) rate.
- Effective Tax Rate
- Your total tax divided by your total income — the average rate you actually pay across all brackets.
Continue Your Financial Planning
Methodology
Roth: contributions are made with after-tax dollars, grow tax-free, and are untaxed at withdrawal. Traditional: contributions are pre-tax (larger effective contribution for the same take-home pay reduction), grow tax-deferred, and are taxed as ordinary income at withdrawal. To compare fairly, the up-front tax savings from a Traditional contribution are modeled as invested separately in a taxable side account, since a Roth contributor gives up that same amount of take-home pay.
Frequently Asked Questions
What's the main difference between a Roth and Traditional IRA?+
A Roth IRA is funded with after-tax dollars; qualified withdrawals in retirement are entirely tax-free. A Traditional IRA is funded pre-tax (often deductible), lowering your taxable income today, but withdrawals in retirement are taxed as ordinary income.
Which one is better?+
If your tax rate will be higher in retirement than it is now, Roth usually wins. If your tax rate will be lower in retirement, Traditional usually wins. If the rates are the same, the two are mathematically equal — this calculator assumes any tax savings from a Traditional contribution are invested separately.
What are the 2026 IRA contribution limits?+
For 2026, the IRA contribution limit is $7,000 ($8,000 if you're 50 or older), combined across all your Traditional and Roth IRAs. Roth contributions also phase out at higher incomes.
Can I contribute to both a Roth and a Traditional IRA?+
Yes, but your combined contributions across both accounts can't exceed the annual limit. Many people split contributions to diversify their future tax exposure.
What income limits apply to Roth IRA contributions?+
Roth IRA contributions phase out at higher incomes based on your modified adjusted gross income (MAGI) and filing status, with the exact thresholds adjusted annually for inflation — check current IRS figures for the applicable year. Traditional IRA contributions have no income limit, though the tax deduction may phase out if you or your spouse are covered by a workplace retirement plan.
Do required minimum distributions (RMDs) apply to Roth IRAs?+
No. Roth IRAs are not subject to RMDs during the original owner's lifetime, unlike Traditional IRAs, which require withdrawals starting at age 73. This makes Roth accounts useful for legacy planning or for retirees who don't need the income and want their money to keep growing tax-free as long as possible. Inherited Roth IRAs have their own separate distribution rules for beneficiaries.
Can I convert a Traditional IRA to a Roth IRA later if I choose Traditional now?+
Yes. You can convert some or all of a Traditional IRA to a Roth at any time through a Roth conversion, paying ordinary income tax on the converted amount in the year of conversion. This flexibility means choosing Traditional today doesn't lock you out of Roth's tax-free growth — many people use conversions during lower-income years to shift balances over time.
Can I save my results?+
Yes. Use “Save results” to store a snapshot. Without an account it remains in this browser. If you log in, saved scenarios sync securely to your SmartRates account so they are available on your other devices.
How do I share my calculation?+
Click “Share” in the toolbar to copy a link (or open your device’s share sheet). The link encodes your exact inputs, so whoever opens it sees the calculator pre-filled with the same numbers and the same result.
Can I email my calculator results?+
Yes. Click “Email results” to open your default email application with the current inputs, results, and calculator link already included. Review the message and choose the recipient before sending.
Can I export or print my results as a PDF?+
Yes. Click “Export PDF” to open a clean, printable summary of your inputs and results that you can save as a PDF or print. It includes a timestamp and a link back to the calculator.
How accurate are the calculator results?+
The arithmetic follows the formula and assumptions documented on this page. The result is still an estimate because actual rates, fees, taxes, timing conventions, eligibility rules, and provider calculations can differ. Use figures from your official quote, statement, contract, or tax form before making a financial decision.
Which inputs have the biggest effect on the result?+
Rate, time, starting balance, recurring payments or contributions, and fees usually have the largest effects. Change one input at a time to create a conservative, expected, and optimistic scenario instead of relying on a single forecast.
Are taxes, fees, and inflation included?+
Only when they appear as an input or are explicitly described in the methodology. Do not assume an omitted cost is zero. Review the formula and methodology sections to see exactly what is included before comparing the result with an outside quote.
Can this calculator predict future rates or returns?+
No. A calculator projects the assumptions entered; it cannot predict market returns, inflation, variable interest rates, tax-law changes, or provider decisions. Rerun the calculation with several assumptions to understand the range of possible outcomes.
Why might my lender, bank, broker, or tax software show a different result?+
Professional systems may use daily timing, transaction dates, compounding conventions, rounding rules, account-specific fees, credits, eligibility details, or regulations that a general-purpose calculator cannot know. A small difference can be rounding; a large difference usually means an assumption or included cost is different.
Disclaimer: Calculations are for informational purposes only and do not constitute professional financial advice. Please consult with a certified professional before making financial decisions.