Traditional vs Roth IRA Calculator
With you contribute a year 7500 usd, years until you withdraw 25 years, annual return 7 percent, your tax rate now 24 percent and 2 more fields, traditional vs roth ira comes to $840 — roth advantage, after tax. It is reached in 8 steps, the last of which is 474367.78 - 473527.9, and each one is printed on the page with its numbers filled in. The formula is the one published by IRS, not an approximation fitted to it.
Which IRA leaves you more after tax, comparing the deduction a traditional IRA gives now against the tax-free withdrawal a Roth gives later.
Formula and sources checked · How we check
You contribute a year 7500, Years until you withdraw 25 years, Annual return 7, Your tax rate now 24
$840
Roth advantage, after tax for the example below. Editing a field recomputes the calculator below; this figure holds the answer the page was loaded with.
It is written into the HTML rather than drawn by a script, so a search engine reading this page without running JavaScript still finds an answer.
- Balance either account reaches
7500 * 63.249038$474,368- Roth, after tax
$474,368- Traditional, after tax on withdrawal
474367.78 * (1 - 22 / 100)$370,007- Tax the deduction hands back each year
7500 * 24 / 100$1,800- Refund invested alongside
1800 * 63.249038$113,848- Side account, after capital gains tax
113848.27 - (113848.27 - 45000) * 15 / 100$103,521- Traditional plus the invested refund
370006.87 + 103521.03$473,528- What the Roth is worth over the traditional
474367.78 - 473527.9$839.88
Ask about this in the chatCompare: retiring into a lower bracket
Worked example
At 24% now and 22% in retirement, $7,500 a year for 25 years at 7% builds $474,368 in either wrapper. The Roth keeps all of it. The traditional leaves $370,007 after tax on withdrawal, and the $1,800 the deduction hands back each year grows to $103,521 after capital gains tax, so the Roth wins by $840 — which is how small the gap gets when the two brackets are two points apart.
How to work it out yourself
- 1.Compare marginal rates, not average ones. The deduction saves tax at the rate on your last dollar of income; the withdrawal is taxed as it fills the brackets from the bottom, which is usually lower than the rate you are picturing.
- 2.A traditional IRA is only deductible in full if neither you nor a spouse is covered by a workplace plan, or if your income is below the IRS limit when one of you is. Above that range the contribution is non-deductible and the comparison collapses — a Roth is the better wrapper for the same money.
- 3.Set the refund to "Spent" to see the honest version of what most people do. The traditional account only keeps up if the tax it hands back is actually invested.
The formula
- Balance either account reaches
7500 * 63.249038 - Roth, after tax
- Traditional, after tax on withdrawal
474367.78 * (1 - 22 / 100) - Tax the deduction hands back each year
7500 * 24 / 100 - Refund invested alongside
1800 * 63.249038 - Side account, after capital gains tax
113848.27 - (113848.27 - 45000) * 15 / 100 - Traditional plus the invested refund
370006.87 + 103521.03 - What the Roth is worth over the traditional
474367.78 - 473527.9
Source: IRS — Traditional and Roth IRAs, IRS — IRA deduction limits
Questions people actually ask
- Which is better, a traditional or a Roth IRA?
- Roth if your tax rate in retirement will be higher than it is now, traditional if it will be lower. At equal rates the two are arithmetically identical when the traditional deduction is invested — the difference only appears when the rates differ, or when the refund is spent instead of saved.
- Is my traditional IRA contribution deductible?
- Always, if neither you nor your spouse is covered by a retirement plan at work. If one of you is, the deduction phases out over an income range the IRS resets each year. A non-deductible traditional contribution is worse than a Roth in almost every case, because you pay tax now and again on the growth.
- Can I contribute to both in the same year?
- Yes, but the $7,500 limit for 2026 ($8,600 from age 50) is the total across both. Splitting is a hedge against not knowing your future bracket, which is the honest position for anyone more than a decade out.
- What about required minimum distributions?
- A traditional IRA forces withdrawals from age 73 whether you need the money or not, and they are taxed as income. A Roth IRA has none during the owner’s lifetime. On a large balance that difference is worth more than the bracket arithmetic above.
Related
- Roth IRA CalculatorWhat a Roth IRA grows to, how much of that balance is growth the IRS never taxes, and what the same money would be worth in a taxable account.
- 401(k) CalculatorWhat a 401(k) grows to, how much of it is the employer match, and whether your contribution rate leaves any of that match unclaimed.
- RMD CalculatorThe required minimum distribution from a traditional IRA or 401(k), using the IRS Uniform Lifetime Table denominator for your age.
- Compound Interest CalculatorFuture value of a starting balance plus monthly contributions, separating what you put in from what the interest earned.
- Roth Conversion CalculatorWhat converting a traditional IRA to a Roth costs in tax now, what it is worth at withdrawal, and the retirement tax rate where the two paths break even.
- Backdoor Roth CalculatorWhat a backdoor Roth costs once the pro-rata rule counts every traditional IRA you own, and what rolling the pre-tax money into a 401(k) first saves.
Part of a job
- Planning retirement — 9 pages, in the order the questions arrive
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