Roth vs Traditional IRA Calculator
Enter your annual contribution, current and expected retirement tax brackets, years until retirement, and expected return to compare the after-tax value of each account type.
Your inputs
What this means
Roth IRA
You pay tax now; qualified withdrawals in retirement are tax-free.
Traditional IRA
You deduct contributions now; withdrawals in retirement are taxed as income.
How this is calculated
Both accounts start from the same pool of pre-tax income each year, so the comparison is apples-to-apples. Traditional contributions go in pre-tax, so the full amount is invested and grows tax-deferred; withdrawals are taxed at your expected retirement bracket. Roth contributions are made with money you've already paid tax on at your current bracket, so a smaller after-tax amount is invested, but withdrawals in retirement are entirely tax-free. Both amounts grow at the same expected return, compounded annually.
The simple rule of thumb
If you expect to be in a lower tax bracket in retirement than you are today, Traditional tends to win. If you expect to be in the same or higher bracket, Roth tends to win. Because nobody can predict future tax policy with certainty, many people split contributions between both account types to hedge that uncertainty.