RothvsTraditional
Roth vs Traditional Calculator
Enter your contribution, years to retirement, and expected return. The verdict compares the after-tax value of a Roth against a traditional account at the same dollar contribution, and separately at the same true take-home pay -- the comparison most calculators skip.
The contribution
Employer match is always pre-tax, taxed at withdrawal either way -- it doesn't change the Roth-vs-traditional comparison, only the combined total.
What you pay on this money now, since Roth contributions are after-tax.
What you'll pay when you withdraw, since traditional contributions are taxed then.
Roth is worth $79,694 more after tax, contributing the same dollar amount
At the same take-home pay instead (grossing up the traditional contribution to $9,211/yr), traditional wins by $34,953.
This is the one number nobody actually knows in advance. Below your current rate, traditional's same-take-home comparison wins; above it, Roth wins; equal, it's a wash.
| Roth | Traditional | |
|---|---|---|
| After-tax value at retirement | $624,268 | $544,574 |
| Same take-home pay: contribution/yr | $7,000 | $9,211 |
| Same take-home pay: after-tax value | $624,268 | $659,221 |
How this is calculated
Each account grows as a future value of level annual contributions at your stated return. The Roth balance is withdrawn tax-free; the traditional balance (your contribution plus any employer match) is taxed once, at your expected retirement rate, when withdrawn.
The same-take-home comparison grosses up the traditional contribution by dividing by (1 − your current tax rate) -- the amount that, after today's tax savings, costs you the same paycheck hit as the Roth contribution. It's the fair, apples-to-apples version of this question; comparing identical dollar contributions (the primary comparison above) always tilts toward Roth, because a Roth dollar is a bigger real commitment today.
Frequently Asked Questions
If I contribute the same dollar amount either way, why does Roth come out ahead here?
Because a Roth dollar and a traditional dollar aren't the same size in take-home terms -- the Roth dollar has already been taxed, the traditional one hasn't. Contributing $7,000/year to each for 25 years at 7%, Roth is worth $79,694 more after tax at retirement ($624,268 vs $544,574), because it's effectively a bigger pre-tax-equivalent contribution. This holds regardless of the match -- the employer match is taxed the same either way, so it cancels out of this comparison.
So is Roth always better?
Not at the same take-home pay. Grossing up the traditional contribution to $9,211/year (what it takes to reduce your paycheck by the same amount the Roth contribution does, given your current 24% rate) flips the result: traditional wins by $34,953, because your 18% expected retirement rate is lower than your 24% rate today.
What's the actual rule for picking one?
At the same true out-of-pocket cost today, Roth wins if your tax rate will be higher in retirement than it is now; traditional wins if it'll be lower; they're identical if the two rates are equal. The hard part is that nobody knows their future tax rate for certain -- it depends on your future income, future tax law, and which bracket your withdrawals land in.
Does the employer match change which one to pick?
No, and that's a common misconception. Employer match money is always pre-tax and always taxed at withdrawal, in a Roth 401(k) or a traditional one -- so it grows and gets taxed identically either way, adding the same amount to both totals. It doesn't tilt the comparison; it only makes the combined balance bigger.
What if I'm not sure about my future tax bracket?
Many planners suggest splitting contributions between Roth and traditional to hedge the uncertainty, especially mid-career when your current rate is unclear relative to retirement. This calculator compares two pure strategies, but a 50/50 or 70/30 split is a legitimate real-world answer the tool doesn't model directly -- run each portion's dollar amount through separately if you want the split's combined value.
Does this account for Required Minimum Distributions (RMDs)?
No. Traditional accounts require withdrawals starting at age 73 whether you need the money or not, which can push you into a higher bracket than planned; Roth IRAs have no RMDs during the owner's lifetime. That's a real advantage for Roth this calculator doesn't price in, on top of the tax-rate math above.
SidebySideCalc calculators apply standard, published formulas -- loan amortization, future-value-of-annuity, and deductible/coinsurance cost-sharing math -- to the numbers you enter. They are estimates for comparing two paths, not tax, legal, or financial advice: your lender, plan documents, and a tax professional decide the real figures for your situation.